Is long service leave the key to retention?

Employee retention is a key concern for many employers. Organizations continue to bemoan the high turnover rate of employees and the “Great Resignation” where dangling fruits of more money, added benefits and promises of work-life balance lure away trained employees to what seems to them like greener pastures.

Turnover and lack of trained staff has led to insecurity for business priorities and initiatives and calls into question an organization’s ability to plan for current sustainability and future growth.

Years ago, employees remained loyal with the promise of a pension at the end of a decades-long commitment. These are largely gone or diminishing.

A possible solution — Long Service Leave.

While traveling in Australia recently, I met a woman who was on an extended Long Service Leave from her employer — a children’s hospital where she is a teacher. After losing her 18-month-old granddaughter to cancer in the last year, this extended fully paid time off was the break she needed after working for the hospital for over two decades.

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In Australia, employees working for the same employer for 10 years earn Long Service Leave, the amount of which can vary from six weeks to longer. This leave is in addition to the customary sick leave, vacation, etc. It’s a bonus of sorts for the employee’s loyalty.

What is unique about this leave is that it is fully paid and taken during a time in a person’s career and life that would bring an important refresh. Rarely do Americans have the opportunity to take an extended paid leave of absence. Taking a long-term sick leave or maternity/paternity leave is certainly no vacation, but that’s about the only time Americans are paid when they are away from work for an extended period (other than professors who take sabbaticals).

Long Service Leave provides paid leave to an employee to do whatever the person wants to do.

This article is not suggesting more mandatory employment laws — we have enough of those. Long Service Leave could be a targeted strategy for employers to demonstrate their mutual commitment to the employee — you give us 10 years of loyalty and we’ll give you six weeks or more of paid leave.

And then you give us 10 more — and you will get another Long Service Leave.

A policy of this type would have to have certain requirements. First, the leave cannot be “earned” until the 10-year anniversary. Employees cannot accrue time along the way because if the employee leaves before the 10-year mark, some states may require payment because it may appear to be a forfeiture.

The policy should require that the leave be taken continuously. It’s designed to be a full break from work.

The leave needs to be mandatory, but also scheduled at a time when it works for both the employee and the employer. The Chief Information Officer shouldn’t be taking off eight weeks the month of the company’s complete computer refresh. If taking the leave isn’t mandatory, employees will be afraid to use it. The leave needs to be normalized such as, “Oh Azelia is on Long Service Leave and she will be back on X date.” No big deal.

The leave should be a real break — the kind where the employee’s email is shut down and the employee is cut off from work — not a working break. This would be a tough adjustment for many employees — and that’s the point. They need this break if for no other reason than their mental health.

While the clock could start as soon as the policy is implemented, employers can consider giving long-term employees some pro-rata time so that everyone isn’t taking the leave all at the same time — 10 years from now.

The employer should not control what the employee does during the leave. It’s none of their business unless the employee wants to share.

The amount of leave can be whatever the employer wants it to be — but around six weeks to three months feels about right. While this would admittedly be very difficult for small organizations with razor-thin staffing, most employers can survive this short leave in exchange for 10 years of commitment and the return of an appreciative and refreshed employee.

As with anything, a policy like this could lead to disputes and litigation. An employee terminated just before the 10-year mark, for example, could claim some type of benefit denial. This is true with any policy, but consider that the benefit outweighs the risks.

Karen Michael is an attorney and the president of Richmond-based Karen Michael PLC and author of “Stay Hired.” She can be reached at [email protected].

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