Editorial: Be a Good Employee — Take a Vacation

Summer vacation season is here! Will you be taking a vacation this year? According to a survey conducted by Skift, a travel industry intelligence platform, 40% of Americans did not take a single day of vacation in 2015. Reasons offered by employees for not taking their paid time-off benefit:

• return to a mountain of work (40%)
• no one else can do the job (35%)
• cannot afford a vacation (33%)
• taking time off is harder as one advances in a company (33%)
• want to show complete dedication to the job (28%).

In addition to the personal benefits vacations provide — they reduce stress, which improves physical and mental health, moods, and emotional stability, and they increase productivity and creativity — vacations also translate into bottom-line benefits for employers. The American Psychological Association reports that job stress costs U.S. industry more than $300 billion a year in absenteeism, turnover, diminished productivity, and medical, legal, and insurance costs. Employees who take vacations make these expenditures unnecessary (or at least less likely).

Employees who take their earned vacation also save their employers money in the long term. Oxford Economics found that the hidden costs of unused paid-time-off amount to about $224 billion in liability sitting on companies’ balance sheets. And the accrued paid-time-off costs carried forward grew by $65.6 billion from 2014 to 2015. The average liability per employee for unused vacation is $1,898, and in some firms is more than $12,000.

Employees are losing money, as well. While many unused days are carried over for future use or payout at the employee’s separation, Oxford found that about one-third of paid vacation days are simply lost under use-it-or-lose-it policies, caps on banked days, or expiration of those days. It estimates that employees are forfeiting $52.4 billion in earned benefits each year.

Employers are taking various measures to encourage employees to use their vacation. Some are implementing use-it-or-lose-it policies. Those, in my mind, can be rather unfair — unless the employer hires a temporary fill-in for the vacationing worker. Otherwise, the same work still needs to get done — before, after, or even during vacation. In some jurisdictions, use-it-or-lose-it policies are illegal.

Some employers are taking innovative, incentive-based approaches. RAND Corp. offers 3% of an employee’s monthly base salary for every vacation day taken; employees who take their total 20 days of vacation receive an additional 5% of their annual salary. Software provider FullContact pays workers $7,500 for taking their earned time off, as long as they abide by three rules: they must go on vacation; they must disconnect from work; and they can’t work while they are on vacation. CEO Bart Lorang believes disconnected time off corrects what he calls the misguided hero syndrome — employees who think no one else can do their job. “That’s not heroic,” he says. “That’s a single point of failure. It’s not good for the employee or the company.”

I’m making progress on overcoming that misguided hero syndrome. Usually on my first day back from vacation, when I see what has piled up while I was out, my reaction is “I’m never taking another vacation.” My vacation last month, though, was so good that I didn’t feel that way until my second day back. If I can increase that by one more day every year, by 2019 I’ll be able to make it through the entire first week I’m back, and my 2020 vacation should be a breeze.

Cynthia F. Mascone, Editor-in-Chief