Young workers aren’t waiting decades to take a break anymore. A growing number of Gen Z and millennial employees are planning what’s being called a “micro-retirement”—extended time away from work mid-career to recharge, travel, or pursue personal projects before returning to their jobs.
According to recent survey data from workplace insights platform SideHustles.com cited in Employee Benefit News, nearly one in 10 Gen Zers and 13% of millennials plan to take a micro-retirement in 2025. This isn’t traditional retirement. Think of it more like a sabbatical or extended leave that allows employees to step away without permanently leaving their employer.
“’Young talent, especially Gen Z, are seeing some of the older generations that had more traditional work ethics stressed and burning out,’” said Lisa Reyes, leader of Paychex’s HR center of excellence strategy and talent enablement, who was quoted in the EBN article. “’They want a different path.’”
This isn’t just a passing trend. Among all employees surveyed, 59% would consider a micro-retirement in the future, with 75% wanting their organizations to invest in formal policies around these breaks. For Gen Z specifically, that number jumps to 63%.
This matters for plan sponsors and advisors because it signals a fundamental shift in how younger workers think about their careers and what they expect from employers. The days of working 40 years straight and then retiring at 65 hold little appeal for workers who watched millennials struggle through multiple recessions and saw their parents burn out from workplace stress.
The surprising upside? Micro-retirements might actually help you retain good people. “’When people feel like they’re allowed to take these kinds of breaks, they’re more likely to want to come back,’” Ms. Reyes noted. “’That’s significantly better than losing an employee that’s been burned out because they didn’t have time to pause.’”
The cost of turnover is real. Replacing an employee typically costs anywhere from half to four times their annual salary when you factor in recruitment, training, and lost productivity. If a formal micro-retirement policy helps you retain talent who might otherwise leave permanently, the math starts to work in your favor.
But implementing these policies requires planning. You’ll need to determine eligibility requirements—perhaps employees must work for your company for a certain number of years before qualifying. You’ll need time to cross-train other staff members who will cover the workload. And you’ll need clear documentation processes to prevent knowledge loss during these absences, according to Ms. Reyes.
The approach will vary based on your company size and industry. Larger organizations might have more flexibility to accommodate extended leaves, while smaller firms may need to get more creative with coverage plans. Either way, waiting until someone hands in their resignation isn’t the time to start thinking about retention strategies.
For retirement plan advisors, this trend opens up conversations about flexibility and long-term planning. If employees are taking breaks mid-career, how does that impact their savings trajectory? What happens to their retirement plan contributions during a micro-retirement? These are questions worth addressing proactively with plan sponsor clients.
The younger workforce brings fresh perspectives and technical skills that companies need to stay competitive. As Ms. Reyes explained, “’Appealing to these next generations has become critical. They bring with them new knowledge and new ways of doing things that businesses are going to need in order to be successful years down the road, which means embracing the shifts and trends that they value.’”
Employers who build formal micro-retirement policies into their benefits packages will stand out when competing for younger workers—particularly in a tight labor market where Gen Z and millennials are increasingly willing to change jobs for better work-life balance and comprehensive benefits.
