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I think you should give as many paid holidays as possible. If you did 10 last year (and everything worked out fine), then I would offer 15 this year with 5 of them floating. You may find that the extra paid holidays actually increase employee productivity due to higher morale and satisfaction. I would then keep increasing the paid holidays every year until you see a drop in productivity or team coordination issues.
Regarding the team not being all together sometimes: this is a problem all teams face and they need to learn how to redistribute work load in these circumstances. I have always found that work can very easily be redistributed and our fear of not having the team fully intact is usually over blown. Once you get this down, it’s nice to know that people can leave and the team productivity doesn’t screech to a halt.
Payment of holidays is part of the compensation program. Small businesses generally have less resources. The main factor is do your competitors offer holiday pay? Are you trying to attract certain employees who expect holiday pay? What type of employee atmosphere are you looking to create-your company culture?
More specifically to your more detailed analysis- be careful. By making a holiday an option-that can be taken another time you are creating a “floating vacation day” Vacation day rules-while voluntary -create a right to the worker to receive payment and will as you analyzed mean their will be multiple days during the year when your entire team will not be present. With the holiday you know everyone will be off that day but will have one less day per year that people will take off if you make it a floating holiday. The vacation day will create another vacation day and right to payment. Ultimately the decision is yours-D Bay
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