When one of his most valued employees announced that she was quitting to hike the Appalachian Trail, Kurt Bleicken felt a pang of panic. So Bleicken, the CEO of GreenPages, an $83-million company in Kittery, Maine, told the employee she could return to her job after she was done hiking. Several months later the employee came back to Bleicken's computer-reselling business, charged up and more productive. "I thought, Maybe this isn't such a bad idea," says Bleicken. He now offers a six-week sabbatical, with full pay, to his 165 employees after five years of employment.

Bleicken isn't alone. These days employers and employees alike are thinking more about life-and-work balance. And companies conscious of the tight labor market are looking for ways to keep employees happy and productive over the long haul. While sabbaticals are hardly epidemic--especially among small companies--some growing companies are starting to offer longtime employees periods of extended leave, whether paid or unpaid.

In 1990 Michael May and his partners left Apple Computer to found Empower Trainers and Consultants, now a $9.5-million training business in Overland Park, Kans. None of them had been at Apple for the five years required to take advantage of that company's sabbatical policy. (Apple has since rescinded the benefit.) May says he regrets missing the opportunity, so he instituted a sabbatical policy at Empower. After three years of service, employees are eligible for two weeks of sabbatical that they can combine with one week of their vacation time, for a total of three consecutive weeks off; after six years, they can similarly combine five weeks of sabbatical with one of their vacation weeks.

Some might argue that the last thing a growing company can afford is to let staff members go off gallivanting for long stretches of time. "From an overhead standpoint, it's not cheap," May admits. In his business, "giving someone six weeks off could cost you $25,000 to $30,000 in lost revenue." But refreshed employees, he argues, are more creative employees, and that could enhance long-term retention and productivity. "This has actually saved us a bunch of people who had totally reached burnout," says May. Plus the benefit helps bring people on board in the first place. "It's a differentiator that most firms don't have," he says. "We have a tough time competing for people if they just want the money."

Sabbaticals can disrupt a company's work flow, so May requires employees to give a minimum of two months' notice. What if an employee decides not to return? Both Bleicken and May admit that's a risk. But if that occurs, the reason goes beyond the sabbatical, May thinks. "If they weren't happy with what they were doing, they probably weren't as good at doing it."