How Competitive Leave Policies Improve Financial Services’ Employee Retention
Quick look: Leave policies are more than a convenient employee perk. In the wake of the growing talent shortage, financial service leaders are realizing how these policies encourage strong employee retention. In this blog, learn what a leave policy entails and how competitive offerings retain top talent employees in the financial services sector.
Financial services are all about the numbers. Aside from the ones defining their profit benchmarks, numbers pinpoint the realities challenging this sector’s workforce. The growing shortage of talent is one such reality, causing financial leaders to turn their attention from driving alpha success to stressing over talent management.
Fortunately, the industry talent shortage can be countered by maintaining employee retention. To achieve this, companies are reevaluating and restructuring many of their employee perks and benefits—including leave policy offerings. Discover the details behind a leave policy, and how this HR benefit helps financial services businesses retain top talent.
What’s a leave policy?
A leave policy dictates how many days off a company grants its employees on an annual basis. The policy thoroughly outlines the different circumstances, from personal time to medical emergencies, that an employee may use their leave days.
Companies offer a range of paid, partially paid, and/or unpaid leave options. Some leave is protected by law. For instance, the Family and Medical Leave Act (FMLA) allows certain employees to take up to 12 weeks of unpaid, job-protected leave for specified family and medical reasons while receiving the same group health coverage from their employer during that time.
Most leave days covered in a policy are made at the company’s discretion. Consequently, U.S. companies tend to reserve paid leave options for full-time workers who’ve worked for an allotted amount of time.
What types of leave exists?
Leave policies cover various situations in which an employee may request time off. To better track employees’ leave activities, companies tend to group requests into one of the following categories.
Vacation: These days off represent personal leisure time. Most U.S. employers offer this leave as paid time off (PTO), with 79% of private industry workers reporting to have had access to paid vacation time in 2022.
Sick: Illness hits when least expected. Sick leave allows employees to take time off when they’re feeling under the weather. This leave’s popularity has inspired state and local laws in over 15 states like New York, California, and Washington, D.C. Additionally, 77% of private-sector employees have paid sick leave.
Family and Medical: American workers use this leave to take care of themselves or an immediate family member who’s facing a serious, prolonged health condition. Access to this leave as an unpaid benefit is protected by the previously mentioned FMLA law. However, some corporations offer this leave as a paid option.
Parental: Employees use this time off option to welcome a new child into their household, whether through birth or adoption. Though FMLA law ensures certain employees gain up to 12 weeks of unpaid parental leave, companies dubbed as Best Workplaces for Parents offer an average of 12 weeks of paid paternity leave and 16 weeks of paid maternity leave.
Additionally, one multi-currency management firm is gaining praise within the industry for offering 18 weeks of paid paternity leave to its team.
Holiday: Most corporate businesses offer PTO for federal holidays like Fourth of July and Christmas Day. Certain organizations also provide floating holidays to let employees take off on federal, religious, or cultural holidays not observed by the company.
Bereavement: This leave allows employees to take time off to grieve the recent death of a relative or loved one. Workers often use this time to attend the deceased’s funeral or handle that person’s affairs. Despite this leave being a great example of supporting employee mental health, only 60% of private-sector workers receive paid bereavement leave.
How do leave policies improve employee retention for financial services?
A financial services company’s employee retention rate is influenced by how satisfactory a workforce considers their employee perks to be. In today’s market, a competitive salary isn’t the only expectation of top talent workers. According to a Metlife report, 71% of employees considered paid leave as a benefits must-have in 2022. A separate Forbes study states U.S. employees take an average of 20.3 days off per year.
Leave policy benefits are clearly top of mind for most employees. Consequently, it’s not a surprise that financial services teams struggling to provide a competitive leave policy are more likely to lose loyal employees over time.
Properly catering to employees’ leave needs boosts their morale, health, and productivity while on the job. These positive factors then encourage workers’ desire to stay, which stabilizes and often increases a financial services organization’s overall retention rating.
How can professional employer organizations (PEOs) help financial services firms update their leave policy?
A competitive leave policy has become a go-to HR asset for multiple trailblazers in the industry, including many hedge funds, private equity firms, and venture capitalists. One asset management business spotlights its unlimited vacation policy as a core leave benefit. Though crafting such a policy may seem challenging to small businesses, it is vital to prioritize this offering in order to stay ahead of competitors also trying to secure top talent.
Luckily, PEOs like ExtensisHR can help kickstart this process. ExtensisHR partners receive access to insightful consultations, giving financial leaders the opportunity to brainstorm their leave policy with an accredited HR expert.
Based on those consultations, dedicated PEO professionals will help document a fair and competitive leave policy that reflects the company and the employees’ needs. Risk experts will also ensure the updated leave policy is compliant with relevant federal, state, and local regulations.
Additionally, ExtensisHR can help businesses implement the mobile-friendly and privacy-protected Work Anywhere® platform; once set up, users can manage PTO reports and keep track of their leave days within the tech-forward system.
What else can financial leaders do to retain top talent?
While upgrading their competitive leave policy, financial leaders can work with their PEO partner to improve top talent retention with these six professional-approved HR tactics:
- Complete a cost-benefit analysis to see how the cost of leave benefits weighs against recruitment costs
- Conduct an employee survey to gain transparent feedback on the staff’s leave expectations and preferences
- Ensure leave plans reflect diversity, equity, and inclusivity (provide equal time off for paternal and maternity leave, recognize holidays of marginalized groups, etc.)
- Encourage collaborative project planning and recaps within teams so co-workers are better prepared to handle work when other teammates are on leave
- Practice open, consistent communication about leave changes and guidelines
- Stay educated on leave trends, while boasting the company’s best leave features
Ready to restructure your company’s competitive leave policy? Contact ExtensisHR’s team of HR experts to schedule a consultation today.
