4 Ways Vacation Time Helps Employees and Your Business

4 Ways Vacation Time Helps Employees and Your Business


Taking vacation time is important, but apparently, it’s unusual. The Pew Research Center found that more than half of Americans aren’t using all their vacation time. To be exact, only 48% of workers max out their vacation days. Why? Most cite concerns of overwhelming coworkers during their absence and falling behind at work. American workers let 768 million vacation days go annually, leaving an average of 6.5 PTO days on the table.

But job candidates do understand the importance of vacation. And while 28 million Americans still don’t get any paid vacation time or holidays, 63% of professionals will turn down a job offer from an employer who doesn’t have an ample PTO package. The positives behind finding work-life balance with time off outside of work are undeniable. Maybe that’s why unlimited vacation policies jumped almost 200% in just four years.

Read on for five business and employee benefits of putting vacation days to use, and how you can encourage your teams to go on PTO.

1. Increase collaboration and transparency.

Your teams or business cannot be reliant on any one person. Employee vacations are key to empowering cross-functionality across your teams to fill gaps. When other team members are out, “filling in” sparks knowledge sharing with colleagues who grow in the employee’s absence. Out-of-office time can lead to stronger teams and collaboration.

Plus, by delegating tasks and projects to other employees, your team member can share details that others may not have previously known or had access to—eliminating tribal knowledge that can create future business obstacles. That fuels better business continuity, and helps employees learn to reach out to peers for support during their absence.

2. Build a better company culture.

More than half of American employees aren’t emptying out their vacation time banks because they are worried about it impacting their ability to keep up or their future work performance. Prioritizing wellness and work-life balance is mission-critical to creating and maintaining a better company culture, and letting employees know you care.

Giving employees more flexibility to take time off can help. Having floating holidays for team members to use as desired or having an unlimited vacation policy let team members take time off on their own terms, (while still requiring manager oversight and approval). Team leaders taking time off themselves also sets a clear example and can help alleviate their employee concerns.

3. Increase productivity and profitability.

Employees taking time off supports higher profits and a healthier working environment. In a study by Deloitte, 77% of respondents had experienced burnout. More than half of them referenced more than one occurrence over their careers. And burnout has no bearing on job satisfaction or engagement. 87% of respondents said they are passionate about what they do at work. Still, 70% of professionals don’t feel employers are doing enough to prevent employee burnout.

Time off gives us the opportunity to decompress and return rested and refreshed. Rejuvenated workers perform better. Another study finds that for every 10 vacation hours a person takes, the resulting performance reviews averaged 8% higher. After vacation, most employees are more productive and engaged with managers and colleagues.

4. Increase employee retention.

Encouraging time off is the simplest way to maximize employee retention. Employees with more work-life balance and the ability to go completely offline when they are on PTO are more satisfied with their employers. An employee’s company tenure increases by eight months for every 40 hours of free time away from work.

Retaining employees also saves vital resources, avoiding the cost of retraining and rehiring, and contracting out excess work in the interim.

Here’s how you can encourage team members to take time off.

Company leaders set the tone for your entire workforce. Managers must set an example and take time off and really unplug. This signals to teams that taking time off isn’t just O.K., but it’s encouraged, and that their leaders understand that.

Having Human Resources and people managers talk to teams about the importance of vacation time for mental and physical well-being, (without singling anyone out), can alleviate concerns for employees who are worried about leaving work behind.

Build out a clear vacation policy that empowers your employees to take occasional time off. You can cap the number of vacation days that they can carry over.

Need more help building a culture that attracts job candidates and increases retention?

Meet the Author

Evelyn Vega is the Founder and President at Staffing Strong and the Past President of the Phoenix American Marketing Association. Since 1999, she’s made her career about supporting her clients in building meaningful careers and partnering with businesses in finding quality hires. In her free time, Evelyn sits on various advisory boards and enjoys practicing on her drum set!

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