In the power-suited 1980s, it was bundles of hard cash that attracted and retained top talent.

Today, money is no longer enough. People want flexible working, including the opportunity to take extended time out to volunteer abroad, look after offspring or just recharge the batteries. We want sabbaticals and career breaks - and our bosses seem increasingly willing to offer them.

More than half of the 161 companies questioned this year by IRS Employment Review say they offer extended leave, usually defined as between three to 12 months. Such leave is more common in large organisations with 250 or more workers, and more prevalent among managers and professionals than other occupations, says a UK department of trade and industry (DTI) work-life balance survey.

But what's the reason for this generosity? How would allowing someone to swan off for three months of sun and sea benefit anyone's business? It's all about recruitment and retention. The average cost of replacing an employee is £8,200 (€12,074), says Rebecca Clake at the UK Chartered Institute of Personnel and Development, so allowing an employee time off to explore interests outside the work environs may help increase loyalty and productivity when he or she comes back refreshed and recharged.

Research by the UK Institute for Employment Studies suggests that opportunities for planned absences, including sabbaticals, send positive messages to employees since they feel valued and are prepared to reciprocate in terms of loyalty and putting in extra effort when needed.

Our career expectations have changed and financial remuneration is no longer the only workforce motivator. "Unlike a generation earlier, today's graduates don't want to get on the career treadmill without having an opportunity to get off," says Ms Clake.

Unfortunately, sabbaticals are not offered to all. While figures suggest half of companies offer extended leave, just 35 per cent of employees are aware of such provision, says the DTI. Employers tend to target sabbaticals, often as a reward for long service or to give key staff time away from the workplace to think and readjust.

For some, it's about getting the travel bug out of their system. For others, it's about stepping off the treadmill before burnout. But for bosses, it's a gamble. There is always a danger that workers on extended leave may decide to jack in their jobs for good.

"Many organisations are prepared to take that risk, particularly with the high-income generating people. A sabbatical is a good way for them to go away and recharge their batteries and come back," says Pam Kingsland, a senior psychologist at consultancy firm Career Analysts. "But there is no guarantee."

Much depends on why employees want to take sabbaticals. If it is because their interest in their job or role has waned, a break from the workplace may be insufficient to rekindle that spark. "They may come back and find they are as frustrated as before," says Kingsland, "although they may think that they owe it to the organisation and stay for 12 months before leaving."

There is little conclusive evidence that sabbaticals lead to lower staff turnover. But Sarah Churchman, the director of student recruitment and diversity at PricewaterhouseCoopers, says extended leave, along with other flexible policies, is making a difference.

The global consulting firm offers up to three years unpaid sabbaticals for those who have worked at the company for two years or more.

"Because we have focused on work-life issues and employee engagement for the past six years, our staff turnover is at its lowest point ever," she says.