It's About Time

Dec. 21, 2004
Sabbaticals revive employees, but few companies are offering the energizing perk.

A universal truth about today's workplace is that there's almost no escape from the frenetic pace. Despite the availability of telecommuting, flextime, and job-sharing, workers increasingly find themselves starved for personal time. "Most people find that they simply don't have the time to do the things that are really important to them within the traditional corporate structure," says Carol Sladek, national-practice leader for Hewitt Associates LLC's Time/Work/Life consulting practice. "They want to take extended time off to travel, participate in a social-service project, or simply relax, and two weeks' vacation a year just isn't enough." Enter the corporate sabbatical. In recent years many organizations -- including Charles Schwab, Du Pont, L.L. Bean, McDonald's, Nike, Ralston Purina, and 3Com -- have turned to the practice of providing extended voluntary leaves. The goal? In most cases, to attract and retain workers while boosting overall productivity. By offering extra time off -- ranging from a week or two all the way up to several months -- as a reward for a specified period of service, everyone comes out ahead. Or so the thinking goes. Not surprisingly, the term "sabbatical" means entirely different things to different companies. "Some organizations view it as a paid leave, others as an unpaid leave," says Helen Axel, a management and human-resources consultant based in Lebanon, N.J. "Some guarantee the job, others do not. Still others have a sabbatical policy in place but don't encourage employees to use it." In fact, about the only thing everyone can agree on, she says, is that the general concept centers on providing time for personal growth and/or career development. That's the thinking at Ralston Purina Co., St. Louis. More than 22,000 employees are eligible for a five-week sabbatical after five years of service. Employees accumulate up to five days of paid time a year, which the company holds in a "sabbatical bank" that's separate from vacation time, says Ron Sheban, vice president of compensation and benefits planning. However, employees can also choose to use their paid time off rather than bank it. Currently, about 500 employees have opted to bank the sabbatical days. "The program is an attempt to help employees achieve some sense of balance between work and their personal life," Sheban adds. "Ralston Purina recognizes that today's workplace is fairly intense and that employees are less likely to stay with the company and take a career focus if they don't have an opportunity to recharge once in a while." The company puts no limits on what employees can do. "You can trek through Nepal, take a karate class, or do community work." Yet employees aren't given carte blanche to take off. Managers must approve a request. Company guidelines require that they look at whether the department can meet business and production needs without the employee, whether it will need temporary help, and whether the employee has given adequate notice -- preferably four months or more. A manager does have the right to turn down a request, though the company expects approval whenever possible. And for those who do take sabbaticals, Ralston Purina makes it clear that they won't be demoted or passed over for future promotions, says Sheban. Sladek says organizations that introduce sabbaticals should ensure that employees have a realistic opportunity to take them. "If employees perceive that it is a death knell to their career, they won't take it, and they will assume the attitude that they cannot fully trust the company." She believes that it is a good idea to educate workers on exactly how a program works. "The last thing you want is employees and managers at odds over who takes a sabbatical and who doesn't." At Xerox Corp., the guidelines are clear. Employees can take sabbaticals, but only to engage in social-service projects. Since 1971, when the Stamford, Conn.-based company established its sabbatical program, 470 employees have received a full year of paid leave to participate in volunteer activities they find important. That can range from joining Big Brothers or Big Sisters to working with those afflicted with cerebral palsy. In a typical year, the company receives 50 to 70 applications and selects 10 to 15 employees, says Christa Carone, a spokesperson for Xerox. "We believe that it helps employees' morale and that when [they] return from social-service leaves they are more well-rounded and more ambitious," she says. "It's also a way for the company to do something significant for communities around the country." A few companies, such as AT&T Corp., have discontinued official programs but still continue to provide leaves on an informal basis. The telecommunications giant had a sabbatical program in place from 1991 until 1993 -- and wound up with about 1,500 participants -- but chose to discontinue it because of changing business conditions and poor administration. Still, the "spirit of the program lives on," says spokesman Burke Stinson. "If someone asks their boss for an unpaid leave of absence there's a very good chance that it will be granted." He says that most requests fall into two areas: employees who need additional time off for young children and those who need to tend to aging parents. Although the first sabbaticals in the U.S. date back to the late 19th century, the concept was mostly relegated to universities in the early years. Not until the conclusion of World War II did industry begin to acknowledge the concept -- though it still didn't take off in any real way until the 1960s, when steel and aluminum workers received 13-week sabbaticals as a result of union negotiations. The leave was designed to provide time off for retraining. Then in the 1970s, several companies -- including Control Data, IBM, Wells Fargo Bank, and Xerox -- introduced sabbaticals for nonproduction employees. When the 1990s rolled around, an increasingly tight labor market and greater demand for highly skilled workers prompted many organizations to create programs or broaden the scope of existing ones. "Many progressive companies realized that as work became more intense, people needed an occasional break. The time off was ultimately beneficial for employees and the company," says Axel. Nevertheless, some companies aren't sold on the idea. In fact, the popularity of sabbatical programs has actually waned during the last few years. According to the Society for Human Resource Management (SHRM), 17% of companies offered some sort of unpaid sabbatical leave in 1998, and 3% provided paid sabbaticals. By comparison, 27% of companies offered unpaid sabbatical leaves in 1996, and 6% offered paid sabbaticals. Critics claim that granting employees time off frequently backfires. Instead of refreshing themselves, many workers wind up job hunting, they argue. What's more, an employee's absence can wreak havoc on co-workers, who must often take up the slack and work harder in a key employee's absence. In fact, two years ago Apple Computer Inc. discontinued a 12-year-old program that allowed six weeks' paid time off after five years of service. When Compaq Computer Corp. acquired Tandem Computers in 1997, it too pulled the plug -- saying that the program was too disruptive. Axel says that when it comes to measuring the effectiveness of a sabbatical program, one of the biggest challenges is quantifying results. There's almost no way to measure the direct outcome of a program, she says. What's more, greater loyalty and increased productivity are often part of an overall human-resources strategy rather than the result of a single program. Yet, "Many organizations believe that it can give them a competitive advantage in the labor market," Axel notes. That's certainly the thinking at Arrow Electronics Inc., a Melville, N.Y., producer of electronic components and computer products. The firm, which has nearly 7,000 employees in North America, has granted about 1,300 sabbaticals since it introduced a program in 1994. It offers all full-time employees who complete seven years of service up to 10 weeks of paid leave. "The program helps attract and retain employees. It also serves to revive and rejuvenate workers who might be headed for burnout," says Kathy Marx, Arrow's manager of human-resources programs. The $8.3 billion company (1998 sales) promotes the sabbatical program in all recruitment ads. And it gives employees a two-year window to use the benefit -- so that managers and workers can schedule it at a mutually convenient time. Equally important, however, the firm uses sabbaticals as a way to develop talent internally. When an employee takes a sabbatical, another lower-level employee takes over and has an opportunity to learn the job. Ultimately, the success or failure of a sabbatical program hinges largely on a company's management philosophy and culture, says Sladek. Yet, even companies that are eschewing sabbaticals are increasingly turning to vacation bonuses and other incentives for rewarding workers who stay. "The fact is," she concludes, "it's a competitive labor environment, and employers are learning that there's a payoff in keeping valued employees and rewarding them. They're realizing that, in the end, everyone comes out ahead."

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