At the peak of the “Great Resignation” in 2021, more than 50 million people across the United States left their jobs, driven by rising stress levels, burnout and changing expectations about work-life balance. Nearly half of those who quit pointed to poor or insufficient benefits as a significant reason for their departure. This unprecedented wave of resignations highlighted how deeply employees value support that allows them to rest, recover and manage personal responsibilities alongside their professional lives.

Among wealthy nations, the United States remains the only country that does not guarantee paid time off, including paid holidays, vacation days or maternity leave. Across the Organisation for Economic Co-operation and Development, such protections are considered basic employment standards. Although some employers have expanded PTO offerings in recent years, many workers still receive no paid leave at all, and fewer than half benefit from consolidated leave policies that combine personal, sick and holiday time.

The financial impact of high employee turnover is substantial, with the cost of replacing a single worker often reaching the equivalent of a full year’s salary once recruitment, training and lost productivity are factored in. A new long-term study suggests that robust PTO policies are essential for reducing these losses. Using 18 years of national data and more than 32,000 observations, researchers examined how different levels of paid time off influence voluntary resignations.

The study was the first to apply the Conservation of Resources Theory to PTO, which proposes that employees are more likely to remain in their roles when they have sufficient time to restore their energy and cope with personal demands. Rather than simply measuring whether paid leave exists, researchers explored how varying amounts affect turnover, paying special attention to early-career men and women and how their responses differ over time.

Results showed that offering just one to five days of paid time off produced only minor reductions in quitting and little impact when genders were analysed separately. Providing six to ten days, however, significantly lowered resignations, especially among men. The most substantial retention effect appeared when employees received 11 or more paid days off per year, with both men and women far less likely to leave their jobs.

For women, smaller amounts of PTO made little difference, but once leave exceeded 11 days, quitting dropped sharply, suggesting they generally require more time off than men to reduce turnover meaningfully. Although men already resign at lower rates overall, additional PTO benefited both groups. The findings indicate that minimal leave policies are insufficient, and that meaningful time away from work is not a luxury, but a proven strategy for stability, wellbeing and long-term employee retention.

More information: Patricia Stoddard Dare et al, Does one week now prevent two weeks notice later? A longitudinal study of paid time off and employee retention, Journal of Strategy and Management. DOI: 10.1108/JSMA-02-2025-0059/1337299

Journal information: Journal of Strategy and Management Provided by Florida Atlantic University