How serious are Indian employers about employee time offs? Not much it appears!
“We are an organisation, that truly believes that a healthy mind is a useful mind,” said the CEO and MD of one of India’s largest FMCG companies in his annual address to its employees. “We encourage you,” continued the senior leader,” to take vacations, and make sure that you refresh you mind and spirit from time to time.” Abhishek, a sales executive in the company, patiently heard the speech until the end and started wondering, “What about the leave that I had applied for my biking expedition 2 months back? That was never approved. Why does the company merely pay lip service?” As Abhishek waits for the time when his manager finally understands the importance of the seemingly-pointless pursuit of a biking expedition, one wonders, “Is Abhishek the only employee who faces this dilemma? Is it possible that there are others like Abhishek within and outside his company who face this regularly? Are Indian employers really committed toward employee welfare? How important is leave and vacation time for an employer and an employee?”
People Matters conducted a survey in December 2013 among employers across the spectrum of the Indian industry to answer the above questions and to benchmark leave and vacation practices in India compared to other geographies. A total of 70 CEOs, MDs, and HR Heads participated in the survey, and the results indicate that in many areas, there are remarkable differences between Indian and global employers when it comes to their approach and commitment toward employee leave and vacations.
According to ILO statistics, Indian employers lag behind their peers in a majority of the global employment markets purely in number of formal leaves granted. Most of the employers taking the survey responded that their formal policy allows an employee a limit of 20-25 paid leaves in a year. The international research body, Center for Economic and Policy Research’s statistics reveal that national policy in many countries, not only provide for paid leave, but also for paid time-off for vacations. Some nations, such as Austria and Portugal provide for as many as 13 paid leaves and 22 paid vacation time off (a total of 35 paid leaves). Spain provides 34 (22+12) and Italy provides 31 (20+11) paid leaves. Only 23 per cent of employers taking our survey responded saying that they provide more than 30 paid leaves.
The cost of working in a growing third world economy?
More than 51 per cent of employers say that they do not formally or actively encourage leave and time off. At the same time, when the respondents were asked about some of the key changes noticed in employees after coming back from leave, a majority revealed that they notice a positive change in an employee’s attitude, engagement, and productivity after they’re back from a leave. While the benefits are evident, what’s stopping employers from encouraging employees to take time off from work?
When we asked employers on why they do not proactively encourage employees to take regular leaves, 50% of the respondents say that they are always short staffed and this prevents managers to actively encourage their team members to take leaves. Economic theory points toward India being in a development state at this point. This refers to an evolution from a state of impoverishment toward progress and economic development, often accompanied by the need for greater per capita output from individual entities. While the demands from work and workers continue to increase, there is a possibility that Indian employers just cannot afford to let go productive workers for too long without business disruption. While this indicates an evolutionary state of affairs, people who disprove economic theory argue that Indian organisations are trying too hard too fast. The danger of burnout and fatigue among the most valuable human assets in organisations is thus clear and present. Is this the cost of working in a growing third world economy?
Tough to be a parent- fewer maternity and paternity leaves
The ILO released a report in March 2013 comparing maternity and paternity leave entitlements in various geographies. Russia and Italy provide the maximum leave entitlements for maternity and paternity leaves with as many as 140 leave entitlements (20 weeks), followed by Brazil (17+ weeks). Almost 35% of employers in our survey responded saying that they only provide between 6 and 12 weeks of maternity leaves. The ILO survey also corroborates that India is among the nations where average maternity leave entitlement is among the lowest in the world. Besides that, a majority (50%) of organisations in India provide less than a week’s time off for paternity. Some nations, such as the UK provide a maximum of 280 days of maternity and paternity leaves with as much as 90 per cent of pay.
Research proves that keeping new parents happy is cheaper than finding new employees, which can cost between 50 and 200 per cent of the employee TCO. Google recently increased its maternity leave from three to six months and consequently realised a fall in new-mom attrition by half. While there are no substantiated studies on the effects of shorter maternity and paternity leave entitlements, it certainly seems tougher to be a new parent employee in India compared to other nations.
Not quite rewarding to be dutiful
While Indian employers appreciate employees taking fewer leaves, does that translate into any form of tangible benefits for a dedicated and sincere employee? Our survey indicates otherwise. When employers were asked on how they reward employee who take fewer leaves than entitled, not too many appear keen to consider rewarding an employee for their dedication and sincerity. 60% of the employers taking the survey say that when the leaves of an employee lapse at the end of the year, they simply do nothing about it. Only 24 per cent remunerate employees for the number of leaves that have lapsed, and only 16 per cent willingly carry forward a part of the lapsed leaves to the next year’s entitlement.
This reveals a slightly disturbing dichotomy of the average Indian employer. While the Indian employer passively discourages employees to take too many leaves, they are also reluctant to provide incentives for the ones who comply. Studies indicate that the Indian workforce is among the most vacation-deprived in the world. Arguments are ubiquitous, all pointing toward the disconcerting effects of a vacation-deprived workforce. Too less time away from work affects productivity and leads to fatigue, depression, insomnia, and memory loss. Perhaps the most immediate-term which an employer should consider is the phenomenon of ‘presenteeism.’ Presenteeism refers to the state where an employee is simply avoiding ”absenteeism” by showing her/his presence in office. Ultimately this affects the usefulness of an employee. Perhaps it is time for HR and business leaders to readjust their lens while looking at employee metrics and maybe realise that seeing less of an employee may actually mean getting out of him.