Floating holiday pay is a type of paid leave that employers offer employees in addition to standard paid holidays. Unlike fixed holidays, such as Christmas or Thanksgiving, floating holidays offer employees the flexibility to take a paid day off at their discretion. This benefit allows employees to observe religious holidays, personal milestones, or other important days that may not be covered in standard company policies.
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As a business owner or human resources manager, you may come across floating holiday pay in your company’s benefits structure. Floating holiday pay allows employees to take a paid day off on a date of their choosing, rather than on a fixed company holiday. This provides flexibility for employees who may observe different cultural, religious, or personal occasions, while also helping businesses accommodate diverse workforce needs.
For example, if your company provides two floating holidays per year, an employee who does not celebrate Christmas may choose to take time off for Diwali or Lunar New Year instead. This approach ensures fairness while maintaining operational efficiency, as employees can schedule their time off in advance rather than taking unplanned absences.
What is The Difference Between Floating Holiday Pay and Standard Paid Holidays?
While paid holidays are company-designated days off, such as New Year's Day or Independence Day, floating holiday pay allows employees to choose their own paid days off. The key difference is that floating holidays offer customization, whereas standard paid holidays are the same for all employees.
What is The Difference Between Floating Holiday Pay and Paid Time Off (PTO)?
Floating holiday pay and paid time off (PTO) are both forms of paid leave, but they serve different purposes. Floating holiday pay is specifically designated for employees to take a paid day off on a date of their choosing, typically in place of a fixed company holiday. Floating holidays are usually separate from standard PTO and may not carry over if unused.
On the other hand, PTO is a broader category that includes vacation days, personal days, and sometimes sick leave. Employees can use PTO for any reason, whether for leisure, illness, or personal matters. Unlike floating holidays, PTO is often accrued over time and may have different carryover or payout policies depending on company rules.
In short, floating holidays are a specific type of paid leave tied to holidays, while PTO is a more general leave policy covering various needs.
How Does Floating Holiday Pay Work?
Employers offering floating holidays to employees typically outline specific guidelines in their employee handbook. Some companies provide a set number of floating holidays per year, while others allow employees to choose their days based on their personal needs. The process for requesting and using floating holiday pay varies but often follows the same procedure as requesting paid time off (PTO).
Additionally, some employers allow employees to carry over unused floating holidays into the next year, while others require them to be used within the same calendar year. Employers should establish how floating holidays work in their company's labor standards and policies. The employee handbook should also clearly outline floating holiday pay eligibility, usage rules, and whether unused floating holidays expire or carry over.
Do Companies Have to Provide Floating Holidays?
In most countries, like the United States, companies are not legally required to provide floating holidays. It is up to companies to use their discretion and make decisions in accordance with their internal policies and benefits structure.
In deciding whether or not to offer floating holiday pay, employers should carefully consider the pros and cons of providing this type of paid leave.
The Pros and Cons Of Floating Holiday Pay
While providing floating holiday pay is not legally mandated in most countries, it can benefit a company’s workforce and overall success in several ways:
Flexibility for employees: Employees can take time off for holidays or personal events that are most meaningful to them, improving job satisfaction.
Enhanced employee satisfaction: Providing floating holidays encourages a healthy work-life balance by giving employees more control over their time off, helping them manage personal and family commitments. It also shows that the employer values personal needs.
Supports Workplace Diversity: Recognizes different cultural, religious, and personal observances, making the workplace more inclusive.
Competitive Benefit: Companies that offer floating holidays can attract and retain top talent.
Increases Productivity: Employees are less likely to take unscheduled time off since they can plan their floating holidays in advance. This results in fewer unplanned absences.
Despite its benefits, there are several drawbacks associated with floating holiday pay including:
Potential scheduling conflicts: If too many employees take time off at the same time, it can disrupt company operations.
Administrative complexity: Tracking floating holidays separately from standard PTO can add extra work for HR and payroll teams.
Limited carryover policies: If floating holidays don’t carry over, employees may feel pressured to take time off at inconvenient times just to use their benefit.
Confusion among employees – Clear communication is needed to ensure employees understand the policy.
Give Your Team the Flexibility They Deserve
Floating holiday pay is a valuable part of an employee benefits package, giving workers the flexibility to take a paid day off when it matters most to them. This type of paid leave helps support diversity, work-life balance, and overall employee satisfaction.
When you use Playroll, you gain access to seamless benefits solutions, ensuring that floating holiday pay and other employee benefits are managed effortlessly.
A floating holiday is intended to replace a holiday of the employee’s choice, while a personal day is a general day off for any personal need. Floating holidays may expire if unused, whereas personal days often fall under a company’s broader PTO policy.
Companies may or may not pay out unused floating holidays, depending on the policies and laws in their jurisdiction. Some have a "use-it-or-lose-it" rule, while others allow carryover or payout upon termination. Employees should check their company handbook and local labor laws for specific rules.
Employees should follow their company’s employee handbook guidelines, which typically require requesting floating holidays in advance and getting manager approval.
Milani is a seasoned research and content specialist at Playroll, a leading Employer Of Record (EOR) provider. Backed by a strong background in Politics, Philosophy and Economics, she specializes in identifying emerging compliance and global HR trends to keep employers up to date on the global employment landscape.
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Employee retention goes beyond just reducing hiring costs. It’s about fostering the type of work environment where team members feel truly valued and are motivated to stay. High turnover can cost companies thousands in recruiting, onboarding, and lost productivity. Research suggests that the cost of hiring is only recovered after 6 months of the employee working. In tech roles or particularly senior roles, this can stretch up to a year. If an employee leaves your organization soon after joining, you are likely to never have seen any return on investment for that hire.
On the other hand, effective workforce retention boosts morale, productivity, and contributes to a strong company culture.
A study by Gallup finds a strong correlation between engaged teams and positive outcomes for organizations, including:
Up to 51% reduction in employee turnover
A boost of 23% in profitability
A whopping 70% increase in wellbeing
The 3 Pillars of Employee Retention
What are the building blocks of employees staying for longer? There are three critical components that form the basis of retention – it’s important not to neglect any one piece of the puzzle. Below, we’ll deep-dive into each of these pillars in more detail.
Compensation and Attractive Benefits
One of the main drivers for employee retention is competitive pay paired with meaningful benefits. This goes beyond the initial offer you make to convince someone to join your team. To retain these team members, meaningful annual salary increases that keep up with or exceed inflation and performance bonuses also play their part.
Career Development and Growth Opportunities
Investing in professional development drives employees to stay by showcasing that they have clear pathways for growth within your organization.
Companies with staff retention strategies that include regular upskilling and budgets for training, mentorship programs, and clear pathways for promotions often see employees more committed to their roles, knowing that their career progress is prioritized.
Work-Life Balance and Flexibility
Providing flexible working conditions, like remote work options or adaptable hours, supports employees' work-life balance and improves retention. Studies show that 80% of employees feel more loyal to companies that offer flexibility in the workplace.
10 Effective Employee Retention Strategies
1. Offer Salary and Benefits That Go Beyond The Minimum
Attracting and retaining employees begins with a competitive compensation package. To set competitive salaries, follow these steps:
Conduct thorough market research to benchmark salaries. Analyze industry trends and get reputable salary data to understand what competitive pay for the role looks like.
Factor in the cost of benefits, bonuses and required employer contributions to offer a competitive total compensation package.
Tailor your salary bands based on experience, qualifications, and unique skill sets. Experienced professionals or those with in-demand skills may expect higher compensation.
Offering employee benefits such as health insurance, retirement savings plans, and paid time off ensures that employees feel financially secure and valued.
Companies that go beyond statutory required benefits – offering perks like financial wellness programs, mental health resources, and flexible hours – stand out in retaining and attracting their workforce. Offering remote working options has also become an increasingly attractive perk, with a whopping 98% of workers preferring to work remotely at least some of the time. Being flexible in this area can give you the edge over organizations that mandate a full return to office.
People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call “baseline rewards.” If someone’s baseline rewards aren’t adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. The best use of money as a motivator is to pay people enough to take the issue of money off the table.
Daniel H. Pink, Author of Drive: The Surprising Truth About What Motivates Us
2. Provide A World-Class Onboarding Experience
First impressions matter. A smooth onboarding experience sets a solid foundation of success for new hires, making them feel supported from day one. It provides new employees with all the tools, resources and documentation they need to hit the ground running and integrate into the company culture.
This is especially important if you manage a global team where good communication is extra important to succeed. Some hallmarks of a good employee onboarding program include:
A structured onboarding schedule that includes essential tasks that quickly set them up to succeed and clear expectations for their first 30, 60 and 90 days on the job.
Set up introductions to key stakeholders and team members, and offer new hires an onboarding ‘buddy’ who can answer any questions they might have.
Provide easy access to all the tools, policies and procedures they’ll need in their day-to-day work. Using project management software such as Monday.com, Asana, Trello or Jira is a great way to keep this organized in one place.
Want to keep your best talent?
See how an EOR like Playroll can help you provide competitive benefits and seamless global HR support, setting up the building blocks of retention from day one.
Having a bad manager is a driving reason why employees leave. Conversely, a supportive manager can play a crucial role in helping employees stay and thrive at work.
That said, the skills to be a good manager doesn’t necessarily come naturally – it’s worthwhile to invest in training that helps managers to become more effective mentors to encourage employee development.
4. Invest in Employees' Professional Development And Career
Having access to plenty of upskilling opportunities show team members that the company is willing to invest in their growth, helping to retain employees who see a future within the organization.
How do you promote professional development in practice? Offer regular skill-building workshops, certification courses, or leadership development programs. Recognize employees’ milestones in completing growth goals, whether it’s through dedicated recognition programs and channels or tangible rewards like performance bonuses.
In addition, a structured career development program helps employees visualize a future within the company, reducing the chances of losing top talent to competitors offering growth opportunities.
Outline the career paths within your organization and what employees need to achieve to progress. Specify what type of skills, experiences, and milestones are required for employees to advance.
5. Work On Maintaining Work-Life Balance For Your Team
Today’s employees prioritize companies that respect their need for personal time.
Flexible scheduling and remote work options promote better work-life balance that supports both productivity and well-being, significantly reducing turnover – 71% of remote workers say it helps to balance their work and personal lives.
Other practical ways to improve employee work-life balance include implementing mental health programmes and setting a realistic workload that is manageable to complete in work hours. Plus, encourage employees to disconnect after work hours and take their paid time off.
6. Provide Regular Feedback and Conduct Stay Interviews
Frequent feedback and stay interviews are invaluable tools for gauging employee satisfaction. These touchpoints give employees a structured way to share what they value at work, and voice their needs or concerns. In turn, this allows management to course-correct if there are gaps and problems within the organization.
Set up quarterly employee engagement surveys to gather this feedback and compare results over time. Conducting regular performance reviews also helps employees reflect on their progress and provide proactive feedback on where they need support to hit their goals.
7. Give Employees Autonomy In Their Work
For employees, few things raise a bigger red flag than a micromanager that controls every aspect of their work, decreasing trust and confidence on the job.
Giving employees autonomy over their work boosts morale and creates a sense of ownership. Empowered employees tend to feel more invested in their work, resulting in improved job satisfaction and lower turnover rates.
Human beings have an innate inner drive to be autonomous, self-determined, and connected to one another. And when that drive is liberated, people achieve more and live richer lives.
Daniel H. Pink, Author of Drive: The Surprising Truth About What Motivates Us
8. Conduct Meaningful Exit Interviews
When employees decide to leave, conducting exit interviews helps uncover underlying reasons for turnover. This feedback is essential in refining employee retention strategies and pinpointing areas for improvement.
When conducting an exit interview, make it clear that the conversation will remain confidential and won’t impact future reference. Conduct it in a neutral setting, and have it led by someone outside of their direct team.
Open-ended Questions For Exit Interviews
What aspects of your role or the company culture did you find most challenging?
Is there anything that would have encouraged you to stay?
What did you enjoy most about working here, and what will you miss?
Do you feel you had the resources and support needed to do your job effectively?
9. Improve Your Hiring Process
A thoughtful hiring process can help set up the future success of your employees. Ensure that candidates align with the company culture and values. This approach to recruitment helps secure employees who are genuinely invested in their roles, minimizinghigh turnover.
To help draw employees that will build up your company culture, implement a referral program that rewards current employees for suggesting suitable applicants. Since current employees are already embedded within your company culture and know what is required for success, they are an excellent way to attract good candidates.
Additionally, add steps to your hiring process such as team-based interviews or assessments, and ask behavioral interview questions that will reveal how the candidate handles real-life scenarios.
10. Look for the Tell-Tale Symptoms of Burnout
Monitoring signs of burnout allows leaders to pick up on issues before they escalate. When employees feel proactively supported, they’re more likely to stay committed to their roles.
So, what should raise the alarm bells? Burnout symptoms include chronic exhaustion, reduced performance, and a lack of motivation. When employees experience burnout, they often feel detached, irritable, and dissatisfied with their work. Physical symptoms like headaches and sleep issues are common, as well as an increased vulnerability to illness.
Provide A World-Class Employee Experience with Playroll
As employers strive to improve employee retention rates, effective HR tools can streamline the experience for both employees and managers. Playroll offers leading EOR software that simplify global workforce management, helping organizations compliantly employ and manage teams worldwide. With hands-on support for both employers and employees, Playroll helps companies build the type of work environment where employees feel valued and supported to stay.
Book a chat with our experts to find out how we can scale and support your global team.
Post-pandemic, the popularity of remote work has skyrocketed – 98% of workers want to work remotely at least some of the time, according to Forbes. However, there’s no one-size-fits-all. The study concludes that while it has a positive impact on work-life balance for the majority of respondents, it negatively impacts others. In light of this, employers may consider providing flexible work arrangements with the following measures:
Offer remote work opportunities, but have dedicated support to check in on its impact on work-life balance. Having an office space that employees can utilize if they wish can help create clear boundaries between work and home life.
Provide flextime schedules so that each employee can work according to their needs.
Look into the option of compressed workweeks or 4-day workweeks, a strategy that has shown a range of benefits and conversely has proven to even increase productivity.
2. Encourage Regular Breaks
No-one wants to stare at a screen all day. With 69% of workers experiencing burnout from digital communication tools, encourage a culture of taking small breaks throughout the day to help with focused productivity and promote mental health. Implementing structured policies around breaks – such as a set lunch hour, for example – can help with this.At the same time, providing dedicated relaxation spaces in offices can serve as a forcing function for employees to take their breaks.
3. Offer Generous Leave Benefits
Having concrete benefits that promote taking leave will establish your reputation as an employer that takes employee well being seriously. Some of these policies could include:
Annual leave that exceeds the statutory requirements of your country. Explore what that looks like in your country with Playroll’s global hiring guides.
Family-friendly policies, such as parental leave and childcare support, to help them balance their work and personal lives.
Bonus leave, such as birthday leave or mental wellness days.
4. Promote Physical Activity
Good physical health is a surefire way to give your employees’ overall well-being a boost. By bringing fitness opportunities directly to the office, employees can easily incorporate physical activity into their daily routine. It's a win-win situation for everyone – employees stay healthy, and employers get the benefits of a happier, more productive workforce.But what can you practically do to encourage it?
Organize onsite wellness programs, such as workout classes, yoga sessions – even a dedicated gym.
Fitness challenges and incentives can be a fun way to motivate employees to get moving. For example, you can implement a step challenge with rewards for reaching fitness goals.
Don’t neglect to invest in ergonomic workstations for your employees: adjustable chairs, standing desks, ergonomic keyboards and mouse pads can all go a long way to keep employees comfortable and happier.
5. Support Mental Health
Being intentional about your efforts to support employee’s mental health in addition to physical wellness programmes can help you establish a more positive work environment. What could this look like?
Provide access to counseling services to support employees' emotional well-being, whether it's through a dedicated in-house counseling service or referrals to external professionals.
Stress management workshops are a great way to equip employees with the tools they need to cope with pressure in and out of the workplace, from relaxation techniques and mindfulness practices to time management strategies.
6. Establish Clear Boundaries
Poor work-life balance is a direct result of unclear boundaries between work and personal life. As an employer, there’s a few simple tactics you can implement to foster a culture of respect for personal time:
Define your expectations for work hours from the get-go, with set start and end times for the work day. That way, employees know when they're expected to be online.
Set limits on after-hours communication, and encourage employees to switch off their email and other communication tools when it’s the end of the work day.
7. Offer Professional Development Opportunities
Everyone wants to feel like they’re continuously growing and thriving in their career – make it a central part of your efforts to promote overall employee well-being:
Provide a budget for training and skill development programs that offer employees the chance to enhance their knowledge and expertise in their field, whether it's through workshops, online courses, or certification programs.
Have career advancement paths that provide employees with a clear roadmap for progressing in their careers, from entry-level roles to leadership positions. Outline the skills, experience, and milestones needed to reach that next step in your organization.
Offer mentorship and coaching programs that pair employees with experienced team members who can offer guidance, support, and networking opportunities.
8. Encouraging Social Connections
In the wake of the COVID-19 pandemic, many workplaces have become hybrid or fully remote. It’s more important than ever to be proactive in encouraging social connections at work in this context, and prevent the sense of isolation that can easily affect employees. Try these tactics to get it right:
Arrange team building activities to help build trust and connections among employees, whether it's a fun game, a collaborative project, or an outdoor adventure.
Establish channels at work that recognize and celebrate milestones and achievements, such as hitting targets, completing projects or marking work anniversaries.
Create awareness among employees of groups they can join within the organization, whether that’s employee resource groups, or social groups. That way, you can build towards creating a truly supportive community among your workforce.
9. Provide Workload Support
Being overloaded at work is a recipe for burnout. Here’s some ways you can head it off and maintain employee well-being:
Assess the workload distribution among your team, and ensure that tasks and responsibilities are allocated fairly and efficiently among team members.
For employees that are currently dealing with a heavy workload, step in to offer direct assistance and invest in resources that helpemployees manage their workload, whether that’s providing additional support staff, giving access to extra training programs or tools to streamline processes.
Prioritize tasks and deadlines that will most likely achieve the goals of your business, which can help reduce overall workload. Encourage employees to focus on high-impact activities and defer less critical tasks.
10. Foster a Culture of Work-Life Balance
It’s an uphill task to improve work-life balance in isolation in the workplace: if you don’t have an established culture around it, you won’t get very far. To build this culture from the ground up, prompt your management team to lead by example. When leaders prioritize their own well-being it sends a powerful message that it’s acceptable for employees to do the same.
To maintain a culture that respects work-life balance, you need to remain responsive to the changing circumstances of your employees. Regularly assess your current policies and practice by distributing surveys to gather feedback from employees, and stay on top of industry best practices to adjust your approach. Ultimately, prioritizing employee well-being and work-life balance isn't just the right thing to do – it's also smart business. Organizations that invest in their employees' health and happiness experience higher productivity, lower turnover, and greater overall success.
Leverage Playroll to offer employee well being benefits
Need a simple way to offer employee well being benefits to your distributed workforce? On Playroll, you can set up global employment benefits at the click of a button. Request a demo today.
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