Firms Are Taking a Break From Sabbaticals

Compaq Computer scrapped Tandem’s sabbatical program soon after taking over the company last year. But Tandem managers were hardly distressed.

“Project managers and middle managers were saying thank you,” said Ron Eller, a Compaq vice president. Sabbaticals are highly disruptive to the business and cost the company money, he said.

Employees adore sabbaticals. Who wouldn’t love getting a month or even a year off work, occasionally with pay and usually with few strings attached? And many companies still believe in them, usually as a recruiting tool or a way to refresh burned-out workers.

But a growing segment of businesses agree with Compaq. About 20% of companies offer sabbaticals, down from 33% two years ago, according to the Society for Human Resource Management. Most sabbaticals remain unpaid.

Naysayers find that giving employees time off during the current labor shortage backfires--they refresh themselves by job hunting. And even if employees return, their absence can be tough on companies and co-workers.

A year ago, Apple Computer pulled the plug on a program that gave six weeks paid time off after five years with the company. During the company’s current financial crisis, the company decided it “really needed everybody on board,” said spokeswoman Rhona Hamilton.

“I don’t think employees have been happy” with the change, she said. “But it’s understood we’re short-staffed and it’s important.”

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High-tech companies were once among the most generous of leave-givers, both because competition for talent is so fierce and because employees burn out quickly working marathon hours.

“You come back and you’re more charged up,” said Amar Hanspal, a marketing director for software maker Autodesk who spent his sabbatical backpacking across Europe. “You learn something about yourself.”

Yet the short product life cycles that demand long hours in the high-tech world also make losing talent to sabbaticals all the more costly, said Eller, the vice president for compensation and benefits at Compaq.

Compounding the problem, managers at the Houston-based company noticed that those taking advantage of the company’s six weeks paid leave every four years have a devil-may-care attitude to their work.

“Workers think, ‘If I’m on a sabbatical to recharge, I shouldn’t have to worry about work,’ ” said Eller, adding that vacationing staff are better at making sure their work is covered.

Compaq didn’t cut the program cold-turkey. Sabbaticals are being phased out over two years. At the same time, the company increased funding to Tandem’s 401(k) retirement plan and other benefits to bring them in line with Compaq’s.

Boosting all-around benefits and work-life balance--rather than giving regular leaves amid brutal hours--also made sense to Hewlett Packard.

In 1994, the company considered, but rejected, the idea of a formal sabbatical program. Instead, it offers employee leaves at any time in their career, with a manager’s approval.

Despite the costs and risks, sabbaticals are far from extinct. For young start-up firms or companies vying for talent, such leaves are a benefit plum.

At Autodesk, in San Rafael, Calif., sluggish profits aren’t threatening the sabbatical program, which is used by almost all who are eligible.

“We always look at other ways of cost-cutting,” said senior benefits analyst Lori Fukui. “The sabbatical program is one of the valued benefits here.”

Ric Edelman, chairman of Edelman Financial Services in Fairfax, Va., feel so strongly about the benefits of sabbaticals that he recently started making the monthlong leave mandatory.

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“If you’ve been in any organization six to seven years, you face burnout. You need to relax, smell the roses,” Edelman said. “I think the company will benefit by your having done that.”

Still, few companies allow long, contemplative leaves anymore. Nowadays, short breaks--such as the six weeks given at Autodesk--are offered to refresh workers.

“The real purpose of sabbaticals has shifted,” said Carol Sladek, a national practice leader at Hewitt Associates consultants. “It’s supposed to be more of a business tool, as opposed to mostly something nice for your employees.”

A few large companies still offer a year off with pay--but only to employees who win one of a few coveted leaves devoted to community service.