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How much vacation time is enough to attract and retain staff? – The Globe and Mail


“We’ve basically taken everything we do with PTO, including sick days and personal days, and given everyone 25 days [per year] to do with what they please,” says Katya Laviolette, chief people officer of 1Password.handout

Like many Canadian employers, Toronto-based password management software provider 1Password is looking to recruit skilled workers in the hypercompetitive talent marketplace.

The company, founded in 2006, has already seen its head count increase sixfold over the last three years, from 108 employees in 2019 to 640 today. After closing the largest investment round in Canadian history this past January – bringing the cybersecurity firm’s total valuation to US$6.8-billion – the company hopes to hire its 1,000th employee before the end of this year.

To appeal to prospective hires and retain existing staff, 1Password recently introduced a compensation package that includes premium benefits, equity in the company and a 7.5 per cent cost of living increase to all employees, regardless of position or seniority. It also took a completely new approach to paid time off (PTO).

“We’ve basically taken everything we do with PTO, including sick days and personal days, and given everyone 25 days [per year] to do with what they please,” says Katya Laviolette, chief people officer of 1Password.

The flexible days off can be used at any time and for any reason, and are offered to all staff members in addition to four companywide wellness days, and two additional days designated for volunteer work.

In the two months before introducing these benefits, 1Password received roughly 950 applications per week. Since they were implemented in January, the company has received an average of 1,600 applications a week.

In the face of a highly competitive hiring environment, and on the heels of a mental health crisis, Canadian employers are exploring new and innovative approaches to giving staff some much-needed time off.

According to a recent study conducted by Robert Half Canada, 49 per cent of employers intend to add new permanent positions in the first half of 2022, and another 45 per cent are hiring for vacated positions. That same study found that 29 per cent are increasing PTO to help attract and retain talent.

“Employers are definitely stuck between a rock and a hard spot,” says Andrew Caldwell, a human resources advisory manager for HR consulting firm Peninsula Canada. “You have a staff shortage right now, and it’s not because there are no workers out there; it’s because employees are expecting more.”

While many employers are responding by providing staff with more vacation days, Mr. Caldwell cautions against being overly generous, as increasing time off could exacerbate staffing challenges.

“The last thing you want to do is offer something and have to backtrack it, because you’re finding that people are using vacation, and now we don’t have anyone available,” he says. “It’s something they should take the time and energy to look into.”

Mr. Caldwell advises employers to explore novel approaches to paid time off that suit their business’s needs, their company’s culture, and employees’ needs while remaining competitive against employers seeking the same talent. He also believes that it’s important for employers to consider the outcomes they want to achieve and find creative solutions that won’t come at the cost of productivity.

Toronto-based PR agency Media Profile recently introduced a new program that does just that: In 2021, the company faced retention issues that its president Allison King largely attributes to pandemic-related burnout and mental health challenges.

“One of the things we’ve always prided ourselves on is low turnover,” she said, adding that there were 12 departures among her staff of 48 last year.

In an effort to reduce employee turnover and increase its appeal to prospective hires, the company introduced a new company perk called the “work away benefit.” The program provides staff members that have been at the company for at least six months with $3,000 to cover travel and accommodations for two to four weeks. Employees are expected to maintain standard operating hours but are only required to work four days a week, and have the option to add up to two weeks of their allotted vacation time to their stay.

Since the program was introduced in November, employees have used the benefit to temporarily relocate to places such as San Francisco, Florida, Costa Rica and Alberta. To date, 15 per cent of employees have booked or completed their “work away” travel, and another 10 per cent have plans to do so this year.

“Since we launched the program, resignations are down 50 per cent,” Ms. King says. “We’ve done a lot of interesting things over the years, but I don’t think I’ve ever rolled anything out that’s gotten the kind of excitement that this did.”

The company has also found the new program to be a significant asset to their recruiting efforts, especially after two years of travel restrictions.

“There’s going to be a natural tendency for people to want to explore, to move around, to do different things,” Ms. King says. “Employers that don’t encourage that are the ones who will be left with disgruntled employees, the ones who are leaving, or maybe the ones who just aren’t as good.”