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We’re looking to implement a scheme whereas employees are rewarded for years of loyal employment.

We’d be interested to hear about similar schemes (or entirely different ones) that reward loyalty and how they work.

For example, how long does it take to earn an extra days holiday allowance? Is there a limit? Does such a policy have a positive effect in your workplace, etc?

UK based company

  • There appears to be a fair amount of data online about the pros and cons, but I can't see this working as a question on SE, as it is so opinion based. – Rory Alsop Oct 1 '17 at 15:11
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We’d be interested to hear about similar schemes (or entirely different ones) that reward loyalty and how they work.

For example, how long does it take to earn an extra days holiday allowance? Is there a limit? Does such a policy have a positive effect in your workplace, etc?

A similar scheme is very common in the US.

In almost every US company where I have worked, folks received a base number of vacation days when they joined the company. That number went up over time. (The only exceptions to this were very small startups.)

Typical would be to start at 2 or 3 weeks vacation. Then it would go up by 1 week after 5 years of service and another week after 10 years of service. Some companies had different levels. All companies had a limit. Some companies allow employees to purchase an additional week of vacation time.

All HR departments in companies where I worked subscribed to industry newsletters, studies, and networking that surveyed companies and distributed the results of their survey to subscribing companies.

This is a common thing in many locales - no need to reinvent the wheel here. If your HR department doesn't understand how this is done in your locale and/or in the US, they should probably bring in a contractor for a while to train them.

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  • A typical example (US, California): one additional day of vacation for every year of employment with the company, with an upper limit of five additional days. – njuffa Sep 30 '17 at 17:52
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An extra day holiday has the same effect as a raise in salary of about 0.4%. It's a bit more beneficial for the company because employees will be just a little bit more rested, and once they have more holidays than they would get elsewhere, it makes it harder for them to leave and give up those extra days.

I would say give a maximum of 5 extra days, and time it so that an employee who stays longer than the average person will get the 5 days. For example, in London many people switch after 3 years, so one extra day per year will work well. In places where you expect people to stay a lot longer, stretch it out a bit more.

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In the UK, I worked for a company that added an extra day of annual leave for every 5 years of service (so, your first 5 years you got the standard 20, then the next 5 you got 21, and so on).

In Australia, we have Long Service Leave. After 10 years of service, you get 3 months full paid leave (in addition to your 4 weeks statutory leave). You can arrange to have this as 6 months at half pay, or even cash it so you get 25% more pay for the year. It's a legacy of immigration - the long service leave allowed people to return to their mother country.

Other rules around Long Service Leave are that you get it paid back pro rata if you quit or made redundant after 7 years service. You also can wait a bit to take it (to coincide with a partner/spouse), or take it here and there over time (some people I know are using for the odd day/week it after 17 years service).

Some places even add an extra week of standard annual leave allowance after 10 years, too.

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