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Taking Leave

Though experts laud the benefits of offering paid sabbaticals to worthy employees, companies are still slow to jump on the bandwagon.

Friday, June 2, 2006
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Last fall, Julie Caturano did something she never imagined: She took an eight-week, paid sabbatical from her job as a regional-communications manager at McDonald's, the world-famous fast-food chain.

Her goal was simple: Spend time with her family, take a few trips and get involved in a volunteer project. Looking back, she says, the opportunity was invaluable and she returned to her job invigorated. As a result, she feels grateful to her employer and strongly believes the time away has increased her loyalty to the company.

"For me, the timing was right. There was an uncertainty about what to expect, but I'd worked my whole adult life non-stop, while raising my three children, and never had that kind of time before," says Caturano, 45, who spent part of her sabbatical volunteering in Biloxi, Miss., after Hurricane Katrina. "It didn't change my life, but it was an opportunity to focus. And I returned to work ready for anything."

Such reactions are typical among employees who take paid sabbaticals, according to human resource consultants. The freedom to explore life beyond the usual routines -- coupled with the security of being able to return to a career -- gives individuals a chance to gain perspective they may not otherwise obtain, they say.

This, in turn, can also create value for employers, workplace experts point out. Almost uniformly, employees return to their jobs feeling renewed, committed and indebted, all of which may not be easily measurable, but, invariably, has a positive benefit for the employer. Equally important, the refreshed employee, they say, is generally more productive, too.

"You can actually identify the benefits," says Carol Sladek, a work/life consultant at Hewitt Associates, the human resource consulting firm based in Lincolnshire, Ill. "The paid sabbatical breeds loyalty, increases engagement and provides plenty of cross-training opportunities for the employees who had to pick up the slack and fill in for the employee who was away."

Indeed, Caturano adds that her eight-week absence gave several of her colleagues the chance to perform some facets of her job and, as a result, learn additional skills they may not have learned otherwise. Rather than feel threatened or insecure about her job, however, she realized this gave McDonald's insights into the potential that may exist for these other employees at a later date without her own value to the company being compromised. In other words, it's a win-win, she says.

For these reasons, Sladak and other experts say the paid sabbatical appears to be garnering more interest in some corners of corporate America. For the moment, though, evidence is merely anecdotal. As of last year, only 6 percent of companies offered the perk, according to the Society for Human Resource Management, and the trend has been stable for the past five years. Similarly, about 19 percent of companies offered unpaid sabbaticals over the past few years.

Reasons for Concern

Experts aren't surprised many companies remain on the sidelines. They point to the choppy economy -- some regions and industries have done better than others recently -- and the perception that paid sabbaticals are expensive and risky, especially if an employee chooses never to return to work. But they also maintain that the need to attract and retain many key people may place the practice higher on the list of benefits to dangle in front of employees.

"It's about differentiating yourself," says Rich Floerisch, chief human resource officer at Oak Brook, Ill.-based McDonald's, which offers paid sabbaticals to employees after 10 years of employment. "From what I know, only about 5 percent or 6 percent of all companies offer a paid sabbatical. So what we've done is given our employees -- who say they value paid time off more than anything else -- a high-value item that differentiates us from competitors."

But of course, there are considerations. Besides the direct cost of paying out extra dollars to an employee for an extended period of time, a sabbatical can easily strain workloads for other employees. If proper planning for scheduling doesn't occur, this can reduce productivity and engender workplace dissatisfaction. And though it appears to be unusual for an employee not to return from a sabbatical, the risk does remain. And finding a replacement is a costly exercise.

"Cost is always the main concern, because whatever you do, there will be costs associated with this benefit," says Thomas Li-Ping Tang, a management professor at Middle Tennessee State University in Murfressboro, Tenn., who has studied the use of sabbaticals as motivational tools. "But if you choose to look at it as an investment, you'll get a return."

In a recent article he co-authored for the Journal of Education for Business, "Sabbaticals and Employee Motivation: Benefits, Concerns and Implications," Tang wrote that between 1995 and 2003, the rate of absenteeism -- which was defined as paid unscheduled hours divided by paid productive hours -- varied between 1.9 percent and 2.9 percent. Absenteeism was at its lowest in 2003, probably due to job losses that followed 9/11 and the bursting of the Internet bubble. At the same time, Tang noted the cost of absenteeism per employee increased from $572,000 in 1997 to $789,000 in 2002.

Given that the increasingly global economy demands employees work harder and faster, Tang concluded paid sabbaticals provide a break for employees who may remain under stress from the post-9/11 atmosphere or the ongoing ravages of downsizing, both of which have created uncertainty in the workplace. By offering a paid sabbatical, Tang argues that companies can combat employee burnout, which is often signaled by absenteeism and high turnover.

"There's no question that it's a harder sell in this economy," says Robert Krinsky, chair emeritus at Segal Consulting, the human resource consulting firm in New York, who has taken a paid sabbatical himself. "But it's really not a lot of money that's involved. It's generally only a couple of months' pay that a company is giving to an employee who has been around a long time. When you view it that way, it shouldn't really seem like a huge expense. I think you get a lot of bang for your buck."

Measuring the Variables

Measuring returns can be difficult, though, human resource experts admit. But in an era where many companies find it increasingly important to retain loyalty, they maintain that a paid sabbatical does offer dividends. The key, according to McDonald's Floerisch, is to evaluate employee preferences about time and money, and if internal surveys show that having paid time off rates highly, that should be taken as a clear signal to consider a paid sabbatical program.

Rather than institute a companywide program, he suggests a go-slow approach. As if conducting a laboratory experiment, a human resource department may want to select one department in which to create a pilot program. After the effort has taken hold, Floerisch recommends reviewing the experience and gathering as much data as possible about the variables involved -- number of employees, time taken, scheduling issues, salaries paid out and related expenses.

"As you know, it's always better to have some metrics," says Floerisch.

In this way, he says, human resource professionals can determine the value that a paid sabbatical program can offer a company and, depending upon the findings, generate a sales tool that can be used to convince senior management that such a benefit should be implemented. After all, a paid sabbatical may well seem like a good idea, but convincing the right decision-makers is another matter, especially when cost-cutting is on the minds of many executives.

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However, Hewitt's Sladek views the glass as half full. Given that the workplace is making more demands on employees all the time, she sees the notion of sabbaticals as an easy way for companies to keep people happy. Of course, she also acknowledges this argument is easy to make. Convincing a company's finance team, which wants to see dollars and cents, can be a roadblock if you're not prepared to do the kind of analysis Froelisch suggests.

Among the variables to take into account in her "actuarial analysis" would be the number of people eligible for a sabbatical; pay rates -- both current and future; the type of jobs that would be eligible; lost productivity projections; which, if any, "lost" employees would be replaced during a sabbatical, and cross-training opportunities. While this isn't a simple formula, it provides a roadmap for a successful pitch.

Key Considerations

And for anyone worried about employees who leave for a sabbatical but never return, Tang has a few suggestions. To avoid such frustrations, he proposes that sabbaticals carry conditions. For instance, employees would be obligated to reimburse the employer the full amount of salary and benefits if they depart immediately, with the reimbursement declining on a sliding scale as time passes into the second and third year after the sabbatical, according to his journal article.

"A lot can depend on the culture of the business or the industry it's in," he says.

Indeed, some companies may simply not be in a position to offer paid sabbaticals. The airline and automotive industries, for instance, are undergoing such financial convulsions currently that such benefits are unlikely to be seen as viable. Conversely, other industries that are doing well and are extremely labor intensive -- such as high-tech or professional services, which includes law and accounting firms -- are ripe for this perk, experts say.

Lynn Charytan is a beneficiary of this trend. An attorney who works in Washington for the WilmerHale law firm, she took a two-month, paid sabbatical in mid-2005. The benefit survived the June 2004 merger between Hale & Dorr and Wilmer, Cutler & Pickering, both of which offered fairly similar paid sabbaticals to their respective staffs, according to Molly Nunes, a spokeswoman for the firm.

"We're more likely to retain people by offering this kind of program," says Nunes. "It helps avoid turnover and burnout."

Charytan agrees. The 40-year-old, who specializes in telecommunications and e-commerce law, had worked for the firm for about 12 years at the time she decided to pursue the leave. With three young boys and a husband, she figured the time was right to slow down for just a little while and reconnect with her family. She ran errands, walked, read books, went to the gym, saw friends and traveled to Israel.

"I admit that, at first, a prolonged leave seemed worrisome," she says. "The view that there's going to be a great time to take a sabbatical, it just isn't true. You can't game that. You just have to pick the time and do it. So I just went for it when the going was good. And you hope your clients won't forget about you when you're gone. But lawyers regularly take four-week vacations, so this was just a longer one. And my clients were understanding.

"As law firms, and many companies, ask more of their people, this somehow evens the score a little bit. It was a reward. We all have to build in a little time in our lives to be human beings. It was an awesome experience and I'm grateful to the firm for the opportunity. It really gave me time to recharge and think. Now I'm back, and I'm happy to be here."

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