“At first glance, business leaders may think that sabbaticals are managerial insanity, particularly in times like these,” says Elizabeth Pagano, co-founder of yourSABBATICAL. “However, once one takes a deeper look, they understand that the benefits of sabbaticals far outweigh the perceived unorthodoxy,” explains Pagano, whose Atlanta-based company helps employers to launch sabbatical programs.
When companies are in “survival mode,” honing in on human resources is more important than ever, according to Pagano. An employer may elect a sabbatical program for its workforce to:
Circumvent layoffs: Sabbaticals can become a short-term strategy to save money now while retaining key workers.
Preserve and protect human capital: Companies that fail to offer programs that motivate and inspire their employees risk curbing productivity levels and losing staff.
Nurture innovation: A paid or unpaid break in the work routine may rejuvenate the individual employee, who upon return from their time off will infect the workplace with their renewed vitality. Most “flex” programs don’t foster the same level of renewal or creativity that flows from a sabbatical program.
Become a talent magnet: Despite a slow economy, businesses will compete for talent.
But keep in mind, the economic phenomenon of “adverse selection,” in which the least productive workers are the most likely to stay when wages are cut or frozen, while the high achievers look elsewhere.
Increase loyalty: Organizations that treat human capital well in difficult times will see their efforts reflected in the staff’s loyalty and general goodwill.
Another option available for employers considering layoffs is mandatory furloughs. With furloughs, however, come a number of challenges in which the employer must be aware of before initiating.
First, employers should determine whether employment agreements exist that would bar them from taking action or that would allow employees to claim that they were “legally promised” a certain amount of pay, explains Doug Christensen, a labor and employment attorney at Dorsey & Whitney.
Christensen notes that most federal and state labor laws are not designed to be flexible or to expedite the concerns of the present workplace. Consequently, wage and hour issues must be carefully examined by employers contemplating furloughs. In addition, employers should also be wary of mandating vacation or “paid time off” days during the furlough, as some state laws do not permit this.
Finally, furloughs can sap employee morale, even among the top performers, says Christensen. Thus, the employer should prudently weigh the costs and benefits of laying off poor performers, rather than forcing all employees to take a furlough.
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