Floating holidays are a new addition to the perks and benefits employers may provide to staff. They can help employees with work/life balance or just give a small reward for being a valued member of the team. Floating holidays can be an inexpensive way to boost morale and engagement, and can even be helpful in attracting talent to your organization.
What are floating holidays?
Floating holidays are days off with pay that employees can take at any time of the year – one or two bonus days off, which they can control. For many employees, the additional time to be used at their discretion is a valuable perk.
Floating holidays are days off in addition to your regular holiday schedule. If you’re closed on national holidays, like Labor Day or President’s Day or have days off for Christmas, Yom Kippur or Muharram, these floating days would be additional time off. Employees can utilize them at any time of the year, creating their own personal “holiday.”
Who wants floating holidays?
Who doesn’t want a day off now and again? But more than just a bonus day off, employees are looking for solutions to the challenges of work-life balance. As complex and hectic as life is, an occasional day off to catch up or wind down is an outstanding perk: in addition to increasing employee loyalty to your company, it can help them reduce stress at work and at home.
In a Gallup survey, 53% of employees said a role that gives them greater work/life balance is important. For small to medium-sized businesses, this perk can help staffers feel they have a bit more control of theirs. But according to SHRM, only one-third of businesses offer floating holidays as a benefit.
Why aren’t floating holidays more common among small businesses?
Why are small businesses reluctant to add these low-cost, highly desired benefits to their employees? Some may not have heard of this new trend in employee perks, while others may be hesitant to add more tracking to their mountain of paperwork. From a financial perspective, of course there is a cost involved in paying employees for time they don’t work, which could act as a limiting factor. Another challenge for businesses with front-facing employees is maintaining a good level of coverage to meet the needs of customers.
Whatever the reason your company doesn’t yet offer this perk, it might be time to reconsider. Today’s applicant market is challenging. With more jobs than workers to fill them, the competition for talent is putting the squeeze on businesses of all sizes. For small to medium-sized businesses, competing with large corporations that offer a wealth of benefits can put your company lower on an applicant’s wish list. Benefits, like floating holidays, could tip the scales in your favor for job seekers.
For millennials, the largest workforce group in today’s market, work/life balance is one factor that attracts them to a company so floating holidays could help bring them into the fold. This generation wants to lead a purpose-driven life as well, reporting this at higher rates than other generations. To position your company in a favorable light for this group, allowing them to use their floating holidays for volunteering could be enticing.
Another reason small businesses don’t offer floating holidays is an aversion to even more paperwork, but when you consider adding one or two floating holidays to your existing sick, vacation, holiday tracking system, they might not be as overwhelming.
For businesses that work with the public, floating holidays may seem an unattainable perk, but most retailers and restaurants have slow traffic days. For some, on Tuesdays you can hear a pin drop: for others, the weekends are slow. Keeping an eye on your peaks and valleys could give you a way to offer the perk on days when traffic is traditionally low. The benefit in employee appreciation and loyalty could be well worth the limited coverage on those days.
By crafting a floating holiday policy in advance, you can keep tracking to a minimum, set up parameters for employees to use the time off, and offer this perk with relatively little future issues.
Creating a Floating Holiday Policy
Considering a floating holiday perk for your staff? If you’re unsure whether it can work for you, you might try piloting the program for six months or a year, then evaluating at the end of the cycle. Develop your policy in advance so every employee knows what they’ve earned, and how and when they can use it. Some guidelines to include:
- Will employees need to clear the time off in advance with their manager?
- How much notice is required to use the holiday?
- How often are the holidays earned? i.e., 2 per year/1 every 6 months
- Are they payable if the employee leaves the company? (In California they may be, check your local requirements)
- Will they carry into the next year if not used?
- Do any blackout days apply, such as particularly busy days of the year?
- How do floating holidays integrate with your regular PTO policy— can one take the Friday after Thanksgiving as a floating holiday?
- Who will manage recordkeeping for the time taken and earned?
Consider the rules and reactions
Carry-over may be a concern. Most businesses require employees to take vacation time in the year it is earned. The “use it or lose it” rule not only encourages time off, but it helps business simplify recordkeeping of carried-over time.
Floating holidays can have a similar requirement. Companies should outline in advance when the holidays must be used and provide employees ample time to take advantage of them before they’re lost. For those employees who don’t use them, they would simply be lost. In most states, any lost time would not be compensable if the staff member leaves your employ. But in California and some areas, time earned may be compensable: check with local authorities to ensure compliance with any regulations.
Are floating holidays required by law?
There are no Federal requirements provide floating holidays for staffers. They’re provided at the discretion of the business. For employers that do offer the perk, 1 to 2 days per year is about average.
Floating holidays can be an excellent benefit to employees, and a low-cost perk even the smallest of companies can provide. An excellent recruitment and retention tool, a few days off per year could help business hire and hold on to the best talent you can find.