The power of paid leave: Why rest fuels results

Everyone needs time away from work, whether it’s to recover from an illness, welcome a new child, or rest and recharge. But for many employees, that time isn’t guaranteed. Instead, people are often forced to choose between their health, their family, and their paycheck. The result is stress that follows them back to work, eroding well-being and productivity. 

A new Dayforce survey highlights how important paid leave and flexibility are to today’s workforce. Less than 40% of full-time employees have paid sick leave, and only one in four has access to paid family leave. When workers don’t have the time to care for themselves or loved ones, the costs show up in lower engagement and higher turnover. When they have that time, the benefits ripple across the organization. 

Employees want more than just a paycheck 

One striking insight from the survey is that workers are willing to give up compensation for better leave benefits. Nearly 60% of employees said they would be willing to accept additional vacation time instead of a 5% pay raise, and more than half would be open to doing the same for additional sick or family leave. Some even said they’d take an outright pay cut to secure extra days off or the ability to work from home one day a week. 

This willingness to trade pay for flexibility underscores how much people value time to recharge, be with their families, or live their lives outside of work. 

Paid leave is a mental health issue 

The data is nearly unanimous: 94% of employees said more paid time off would improve their mental health, with almost half saying that it would be “extremely” helpful. Additional sick and family leave were cited as equally impactful. Workers reported that more leave would reduce stress, help them be better caregivers, and make them feel more valued by their employers. 

The benefits are even greater for underrepresented groups. For example, 97% of Black and Latino employees surveyed said additional family leave would improve their mental health, with eight in ten reporting that it would be “very” or “extremely helpful.” That makes paid leave not just a wellness issue but also an equity one. 

What HR leaders can do 

The message from employees is clear: robust paid leave and flexible work arrangements matter as much as, and sometimes more than, compensation. For HR leaders, this means reevaluating policies and practices to meet employee expectations and enhance overall well-being. 
 

• Recognize paid leave as a strategic priority. With most employees willing to trade pay for more PTO, sick, or family leave, these benefits should be viewed as investments in engagement and loyalty, not costs. 

• Re-evaluate and enhance leave policies. Only 24% of workers have paid family leave, and 39% have paid sick leave. Closing this gap by implementing or expanding relevant policies can help organizations attract and retain top talent.  

• Embrace flexible work. Forty percent of employees said they’d take a pay cut for just one guaranteed remote day a week. Even small, predictable opportunities for hybrid work can have outsized effects on morale, retention, and recruitment. 

• Encourage a culture that encourages time off. Having a policy is not enough. Employees need to feel supported when using it. Leadership can help normalize taking leave by modeling time off themselves and reinforcing that PTO, sick days, and family leave are meant to be used. 

• Monitor the impact. Track indicators like engagement, stress levels, and retention as leave and flexibility policies evolve. These metrics can help HR leaders demonstrate the ROI of people-centric policies and build the business case for further investment. 

A better way forward 

At its core, paid leave is about giving people the time and space they need to be healthy, present, and whole – at work and at home. When employees can care for themselves and their loved ones without sacrificing their paycheck, they come back to work more engaged, loyal, and capable of contributing their best. 

The power of paid leave is clear. It helps employees feel seen, supported, and valued. For organizations, it’s one of the most tangible ways to show that well-being isn’t just a talking point, it’s a priority. By implementing strong leave policies, HR leaders can create workplaces where people thrive and employees and employers benefit.