Vacation and leave policies around the world

February 05, 2018

It’s universally understood that giving employees paid time off lets them come back refreshed, engaged, and ready to contribute to a more positive workplace environment. However, today’s leave policies can take many forms, from vacation to sick days to volunteer leave, and so on. Still, at the end of the day, every annual leave policy is focused on the same thing: giving employees time away so they don’t become burned out and disenchanted with their work.

Here, you’ll discover more about many of today’s most popular HR leave policies as well as the various factors affecting them. To help you decide which of these leave policies is best for your workforce, there are several things you should consider:

  1. What types of leave are required in the various countries in which you operate?
  2. Should your company create a global employee leave program, or should you allow each country or region to determine its own policy?
  3. How does an annual leave policy impact your company’s ability to attract and retain top talent?

Keeping these considerations in mind will help you gain a better understanding of which vacation and other leave policies might work best for your organization.

Unlimited Time-Off Policies

Organizations are always looking for innovative ways to attract and reward employees. In this regard, unlimited time off has become an emerging trend, especially around startups and other young companies. This dynamic approach to HR leave policies allows employees to take off as much time as they wish, entrusting that the work will still get done in a timely and adequate fashion.

The unlimited time-off approach can seem like a drastic departure from the HR leave policies of the past, but more and more companies are starting to adopt this policy. According to the recent results from the Vacation and Other Leave Policies Around the World survey, on a regional level:

  1. 13% of organizations throughout Europe, the Middle East, and Africa have adopted, or are considering adopting, an unlimited time-off policy.
  2. 12% of organizations in the Americas have adopted, or are considering adopting, an unlimited time-off policy.
  3. 8% of organizations in the Asia Pacific have adopted, or are considering adopting, an unlimited time-off policy.

If your organization is considering implementing an unlimited time-off policy, you should also ensure that your performance-based programs are adequate enough to complement it. By having clearly defined performance metrics and policies for your workforce, you can continue to evaluate your employees’ effectiveness through performance metrics, rather than hours/days worked.

Carrying Over and Cashing Out Days

You may be familiar with the following scenario: It’s the end of the year, and the bulk of your employees are rushing to use their remaining annual vacation days. It’s hectic for everyone, hard to keep track of, and it usually results in a sparse workforce in December. So, is this strategy still prevalent with all the additional HR leave policies popping up?

As it turns out, not so much. Currently, 75% of companies around the world are letting their employees carry over unused vacation days from one year to the next. This suggests that a majority of employers are trying to curtail the annual scramble at the end of the year, while also acknowledging that employees now simply prefer to take vacation on their own schedule.

It’s also important to understand, however, the implications of offering employees the ability to carry over unused time off. Employers should certainly consider setting specific policies related to the amount of time off an employee can roll over and whether or not they want to allow employees the ability to cash out unused leave, among many other considerations.

Personal and Sick Day Policies

HR professionals shouldn’t implement policies without first benchmarking against the standards in any specific industry or local region. This is especially true when HR professionals are accounting for how much time they’ll give their employees for personal or sick days. Personal days grant employees the opportunity to step away from the office and are therefore a valuable way to keep workers focused and engaged. Currently, half of organizations offer their employees personal leave.

Meanwhile, sick leave affords employees time off when they’re too ill to come into work. Not surprisingly, a majority of organizations said they currently offer sick leave to their employees. However, HR leave policies based around sick days can fluctuate greatly based on geography and local cultural attitudes toward taking time off work. For example, the average annual number of sick days provided to US workers was 11, whereas the average annual number provided to workers in Argentina was more than 30 days.

Other Leave Policies

In addition to vacation, personal, and sick time, there is also holiday time and a wide array of “other” leave types that organizations can offer their workers. While holiday time is largely dictated by fixed national or local laws, other leaves are handled more at the organizational level. These other leaves can give employees space to celebrate life events, such as marriage or their birthday, dedicate time to continuing their education, enjoy a work anniversary, or take time out to grieve the loss of loved ones. The most popular of all these “other” leave policies include:

  1. Bereavement
  2. Marriage
  3. Study/exam
  4. Volunteer
  5. Sabbatical

Future Considerations for Global Vacation and Leave Policies

Despite the appeal of annual vacation and leave policies that would give employees everywhere the same level of benefits, only 10% of organizations have a global policy for annual leave. This is mainly due to the fact that leave policies are subject to local labor regulations, meaning even the most centralized companies find it easier to simply grant local control over an annual leave policy. In fact, this is the case for the majority of companies around the world, even though 24% still retain control over major aspects at the parent company level. Always remember to keep local regulatory factors such as these in mind as you consider which vacation and leave policies are most suitable to your specific organizational needs.

If you want to learn more about what vacation policies are being offered in various locations or how companies are addressing today’s most prominent HR leave policies, the Mercer US Vacation and Other Leave Policies Around the World Survey or Canada Vacation and Other Leave Policies Around the World Survey is a good place to start.