Young people taking ‘mini-retirement’ with unpaid leave

Human resources experts say an increasing number of employees are requesting permission to take longer than the standard vacation period. Some people call it a ‘mini-retirement’, others call it an ‘adult gap year’.

“We’re hearing more and more employees requesting unpaid leave,” said Sissy Pau, a Vancouver HR consultant.

Philippe de Villers, president of CPHR Canada, an association representing HR professionals across the country, said while there are no exact statistics on the number of people seeking such unpaid leave, there is clearly a trend emerging.

Canadian companies say they are seeing an increase in employees requesting long unpaid leave. Melanie and Nick Thompson’s four children play with two donkeys and a dog near their home in Ecuador. Melanie Thompson

De Villers, who lives in Brossard, Quebec, says the COVID-19 pandemic may have had an impact.

“After COVID, we’re definitely getting more requests than before,” he said, noting that no one would wait 40 years until they retire to travel.

However, this is not a plan for everyone. For most Canadians, taking long unpaid leave during an economic crisis is impossible. According to a Leger survey conducted online in September, 47% of Canadian respondents spend most of their salary on living expenses.

“If you want to take a long unpaid leave, you have to be financially well off or you have to plan well,” De Villers said. He added that people are increasingly pressured by rising prices.

But despite the difficult financial situation, some Canadians said they are not willing to wait until retirement to achieve their dreams, whether it’s traveling, pursuing other interests or simply spending more time with family.

Retirement podcast host Gillian Jonesrud says she’s done about a dozen mini-retirements over a period of between a month and a year, despite starting out with very little income. Based in Kalispell, Montana, he currently coaches others on how to take a career break.

He said that if people set aside 6.5% of their income, they could take one month of unpaid leave every two years.

But de Villers says there are also financial and career implications to consider before deciding on a mini-retirement. He said that for anyone holding a group RRSP or pension, missing six or 12 months of payments could be devastating to their long-term retirement savings.

And when it comes to promotions, he says stepping away has a bigger impact early in your career. If you miss opportunities such as collaborating with colleagues in various situations, your colleagues may get promoted first.

Nick and Melanie Thompson, who are enjoying a mini-retirement, said moving up within the company was not a priority. They drive old cars, shop at thrift stores, and generally live frugally.

They said that when you realize what’s really important in life, you realize you don’t need to spend $100,000 a year on more experiences, either now or in retirement.