Neumann credits the company's benefits with raising retention rates. At the call centers, he notes that turnover never gets above 40% a year, a level that compares favorably to rates across the industry.

The exact impact of the sabbatical benefit on Service Net is still a bit of an unknown since the company is only now coming up on its seventh year in business. Neumann says five employees are slated to go on sabbatical this year. To commemorate their six-year anniversary with the company, employees get a clock that counts down to their seventh-year anniversary, when they become eligible for sabbatical.

In addition, management employees have off every other Friday afternoon from the start of May to Labor Day weekend. "The CEO hates [half-day Fridays]," Neumann says. "He would prefer that everybody get an extra week of vacation. But this works better as a recruiting tool than talking about a higher level of vacation." To emphasize that employees should be enjoying their time off, Service Net also provides every employee with $100 to spend having fun, with the only proviso being that they bring in a photo of the fun they had. The photos decorate a bulletin board near the company's front door and employees vote each year on which employee had the most fun. That employee then gets twice as much fun money the following year.

Service Net also allows management employees to set their own work schedule if it's appropriate for their department. "We don't micromanage people," Neumann says. "So as long as they're getting their work done, the hours can be flexible."

Statistics from the Society for Human Resource Management (SHRM) show that sabbaticals are still a rarity; just 6% of U.S. companies offered them in 2003. But offering employees some flexibility in when or where they work is fairly widespread. Flextime was being offered by 55% of the companies surveyed by SHRM, a compressed workweek was available at 31% of companies and part-time telecommuting at 34%.

Jon Van Cleve, a time/work/life consultant at Hewitt Associates, says flexible scheduling is becoming so common that "it's not even a benefit any more. I am seeing it more as a part of a company's culture." Van Cleve adds that it's a benefit that addresses what employees need: "Most people are asking for flexibility or more control over time."

When Flextime Works

Programs that allow workers flexibility also recognize employees' responsibilities outside of work, says Laura Sejen, practice director for strategic rewards at Watson Wyatt: "A lot of people who are in the workforce today may have children, so there may be the occasional childcare issue, [or] they may have aging parents or other relatives, so there may be an eldercare issue."

Van Cleve says that companies that are considering setting up a program should be sure to educate managers on how to supervise workers under such an arrangement and how to decide which workers are eligible. Programs should start with the stipulation that flexible hours are available only to workers whose performance meets or exceeds expectations. "Many companies say not everyone can work this way, but every worker can have a discussion about it," Van Cleve says. He advises companies not to base the decision on the reason that workers want flexibility. "We encourage managers to stay away from the reason and just focus on the person and the schedule they're requesting. The biggest decision factor [should be] can that person's job get done on this schedule."

One significant plus, Sejen points out: Flextime is an inexpensive benefit to offer. "Not being forced to adhere to 8:30 to 5:30 is something that from the employer perspective doesn't really cost anything and, from the employee perspective, can make people have a better attitude about the workplace and build loyalty," she says.

In fact, SHRM's data shows that employees rate paid time off, like vacations, as among their most important benefits, second only to medical coverage, with 61% of employees citing it. Twenty-eight percent of employees cite flexible work scheduling as among their most important benefits. And when asked what benefits they were most satisfied with, employees ranked paid time off first and flexible scheduling third, with medical coverage in second place.

Consumer products giant Procter & Gamble presumably had that employee sentiment in mind when it said in early May that it would give two extra vacation days this year to 90,000 employees worldwide–basically, to all its employees but its top 35 executives. Workers can take the days off or take the cash value, in what the company termed a celebration of its strong performance over the last two years.

Consultants say employee satisfaction will become a bigger consideration for companies if they start losing a lot of employees as the job market heats up. Sejen says that while employers still aren't seeing big numbers of employees being hired away, they're starting to think they might need to pay attention to this issue. And she notes that companies should always be keeping track of a few key groups: "your top performers, your high potentials and your critical skills employees. Those are the ones for whom there's always a market."

Hewitt's Van Cleve says employers with flextime will be in better shape when the job market does heat up. "As we go forward, organizations that are definitely offering this have an advantage," says Van Cleve. "Those who have these benefits solidly in place are the ones who will hang onto their employees and be the preferred employers."