In the ongoing battle for talent, a landmark study from researchers at Florida Atlantic University and Cleveland State University offers a surprisingly concrete answer to one of the most pressing questions for modern employers. For years, companies have grappled with the high costs of voluntary turnover, a challenge thrown into sharp relief by the “Great Resignation” that began in 2021, which saw over 50 million American workers leave their jobs, often citing burnout and a desire for better benefits. This new research moves beyond speculation, applying the Conservation of Resources Theory to Paid Time Off (PTO) for the first time. It reframes paid leave not as a mere perk, but as an essential resource that allows employees to rest, recover, and manage personal demands, thereby conserving their energy and dramatically increasing their likelihood of remaining with an employer. The study’s findings provide a clear, data-driven roadmap for retaining talent in a competitive market.
The Data-Driven Answer to a Critical Question
A Landmark Study with Unprecedented Scope
The research’s credibility is founded on its exceptionally robust and comprehensive methodology, which sets it apart from previous inquiries into employee benefits. By analyzing a nationally representative dataset spanning 18 years and incorporating more than 32,000 individual observations, the researchers were able to move beyond anecdotal evidence and establish a definitive, graduated relationship between the quantity of PTO offered and the corresponding reduction in voluntary resignations. This long-term perspective allowed for an examination of trends over time, capturing shifts in workforce dynamics and employee expectations. The sheer scale of the data provides a level of statistical power that makes the conclusions not just compelling but authoritative, offering business leaders a rare, evidence-based foundation for making critical decisions about compensation and benefits packages. This approach effectively quantifies the value of rest as a strategic asset for workforce stability.
The extensive scope of the analysis also enabled a granular dissection of how paid leave policies impact different segments of the workforce, particularly early-career men and women. Instead of treating employees as a monolithic group, the study’s design allowed for a nuanced understanding of how demographic factors intersect with benefits to influence retention. This detailed insight is crucial for developing equitable and effective HR strategies that resonate with a diverse employee base. By tracking these distinct groups over nearly two decades, the research provides a dynamic picture of how the value of PTO evolves throughout an employee’s early career stages. This offers invaluable guidance for organizations aiming to create targeted retention initiatives that address the specific needs and pressures faced by different employees, ultimately fostering a more loyal and resilient workforce by understanding the unique drivers of their decisions.
Identifying the Magic Numbers for Retention
A central and perhaps startling conclusion from the study is the pronounced ineffectiveness of minimal PTO policies. The research demonstrates that offering a mere one to five days of paid leave per year—a threshold that aligns with or even exceeds the legal requirements in many of the 18 states mandating paid leave as of late 2024—produces only a negligible reduction in employee turnover. When the data was analyzed separately for men and women, this low level of PTO had no statistically meaningful effect on their decision to quit their jobs. This finding directly challenges the adequacy of current corporate and legislative standards, suggesting that such token policies fail to provide the substantial recovery time that employees need and value. They do not function as the powerful retention tool that many organizations assume them to be, highlighting a significant disconnect between common practice and evidence-based strategy.
In contrast, the study pinpoints a clear and significant turning point where PTO begins to tangibly impact retention. The benefits become clearly visible once an employer offers between six and ten paid days off. Within this intermediate tier, organizations start to see a significant drop in resignations, with the effect being particularly pronounced for male employees. However, the most powerful and conclusive results emerged when employers provided eleven or more days of PTO. At this level, the research observed the strongest retention effect, with both men and women becoming substantially less likely to voluntarily leave their jobs. This specific data point provides a definitive answer for business leaders and policymakers, indicating that offering more than two full work weeks of paid leave is the most impactful strategy for fostering employee loyalty and stability across genders, transforming PTO from a minor benefit into a strategic imperative.
Critical Nuances and Strategic Implications
The Gender Divide in PTO Effectiveness
While the data confirms that more generous leave policies benefit the entire workforce, it also uncovers crucial nuances in how PTO impacts men and women differently. The threshold for a significant retention effect is notably higher for women. The analysis showed that paid time off has little discernible effect on a woman’s decision to voluntarily leave her job until the offering reaches the level of eleven or more days. At that point, their resignation rates decrease significantly. This suggests that women, who historically and currently bear a disproportionate share of caregiving and domestic responsibilities, require a more substantial amount of paid leave than their male counterparts to achieve the work-life balance necessary to remain in their positions. This finding underscores the importance of viewing benefits through a lens of equity, recognizing that a one-size-fits-all policy may not yield uniform results across a diverse workforce.
Despite these differences, the study reinforces that additional paid leave benefits all employees and is not a zero-sum game. While the baseline turnover rate for men in the dataset was already lower than that for women (4.7% versus 6.7%), increased PTO further reduced the likelihood of quitting for both groups. For men, the positive impact began at the six-to-ten-day threshold, while for women, the key was crossing into the eleven-plus-day category. This indicates that while the “activation point” for the retention benefit may differ, the overall principle holds true: more PTO leads to greater stability. For organizations, this means that investing in a robust leave policy is a universally effective strategy, with the most generous plans yielding the broadest and most significant returns by addressing the distinct needs of both male and female employees and fostering a more stable and committed workforce overall.
A Wake-Up Call for Policymakers and Business Leaders
The study’s findings carried significant implications that highlighted a major disconnect between current practices and evidence-based solutions for retention in the United States. As the sole country in the 38-member Organisation for Economic Co-operation and Development (OECD) without a federal mandate for paid leave, state laws have become the primary drivers of policy. The research explicitly stated that the common state-level cap of five days (40 hours) per year simply does not go far enough, as the data proved that the strongest retention benefits occurred well above this minimal threshold. This presented a clear call to action for policymakers to reconsider existing statutes and for business leaders to look beyond mere legal compliance if they were serious about tackling the persistent issue of employee turnover. The evidence suggested that current standards were failing to address the root causes of burnout and resignation.
From a business perspective, the issue was framed as a critical financial calculation. The researchers described voluntary turnover as a “trillion-dollar challenge,” with the costs of replacing a single employee—factoring in recruitment, training, lost productivity, and diminished client relationships—potentially reaching a full year’s salary. The study urged organizations to weigh the direct, manageable cost of providing more generous PTO against these far greater and more disruptive expenses. The conclusion was that meaningful time away from work was not a luxury or an operational drain but a proven, strategic investment in workforce stability and, ultimately, the financial health of the organization. This shifted the conversation from PTO as an expense to PTO as an essential tool for risk management and long-term sustainable success.
