Vacation Time’s True Cost to Your Company

Every business is all too aware of how paid vacation time represents a cost to the company in terms of lost productivity. But most businesses have learned how to cope with and adapt to this basic employee benefit. What companies are less good at recognizing, however, are the benefits a business realizes when its employees take their paid vacation time. This article is about vacation time’s true cost to your company, but from the perspective of the costs incurred when your workers do not take their paid vacation time. Although this may sound counter-intuitive, there are real impacts when employees don’t take the time they’ve been granted.

Americans are Terrible at Taking Time Off

According to Project: Time Off (source), more than half (52%) of America’s workers left at least some paid vacation time on the table in 2017. This is the third year in a row that this figure has dropped (it was 54% in 2016 and 55% in 2015), but the declines have been very small.

Here’s an eye-opening way to look at this situation: In 2017 workers left a whopping 212 million days of vacation unused, which can be valued at $62.2 billion in lost benefits. In other words, each individual worker basically donated $561 of free work to their employer. Why do people do this? The reasons vary widely, but here are a few:

  • Not wanting to appear to be less dedicated or somehow replaceable.
  • Heavy workloads.
  • Lack of coverage for being away or feeling no one else can do the job.
  • Fear of derailing career progress.
  • Inability to switch out of “work mode.”
  • Company leadership doesn’t model taking time off.
  • Anxiety about potential layoffs.
  • Fear of backlash from colleagues and/or managers.

The figure of what employees essentially donate to employers through unused vacation days is actually too low because it doesn’t account for a surprisingly common phenomenon – workers who continue to do at least some work while on vacation. One recent study reports that 56% of American workers do at least some amount of work while on vacation (source), while another reports that fully 30% do a significant amount of work during vacations (source).

Unused Vacation Time’s True Cost to Your Company

At first glance, many businesses are more than happy to have their workers leave vacation days on the table. After all, the business is better off when employees work more, right? The problem is that this often not the case. Workers who don’t use their earned vacation are more stressed out, anxious, and more likely to get sick and have to stay home. The painful truth is that unused vacation time’s true cost to your company is very real – lost productivity when workers are unable to give you peak performance because they need a break – a real break that offers them the opportunity to rest, rejuvenate and come back to work ready to be more fully engaged in their jobs.

As an employer, it’s time to wake up from the illusion that you’re getting more out of your workers when they don’t take earned vacation time. The more likely reality is that you’re losing precious productivity thanks to employee burnout.

The benefits of taking vacation time are huge. In fact, they even begin before the vacation itself. Just planning for a vacation makes people happier and increases motivation for weeks ahead of time (source). And the benefits of a well-deserved vacation can last for months afterwards (source).

Reducing Vacation Time’s True Cost

When you take an honest look at your company’s workplace culture as it relates to taking earned vacation time, what do you see? Then take a look at the actual data from your human resources team in terms of unused vacation days from the previous year. If what you piece together includes a lot of unused vacation and a culture of not taking time off, you have your work cut out for you if you want your company to avoid the costs and realize the benefits of getting your employees to use their vacation time.

Examine your company’s time off policies and make sure they are crafted to encourage taking earned vacation time rather than being a barrier to it. Shifting company culture to one that encourages taking vacation time is harder, but it begins with having company leaders and managers serving as good role models in taking real time off.
Whether or not your workers take all the vacation time they’ve earned, you still need to track all the different kinds of leave they do take. CaptureLeave was created to provide a powerful but easy-to-use solution for managing leave time. Our software-as-a-service (SaaS) application is web-based, which means it’s accessible 24/7/365 from any device with an Internet connection and web browser. You never have to worry about installing updates or performing system maintenance as all of that is handled by us behind the scenes. You can experience the benefits of CaptureLeave with a free 60-day trial, and then enjoy affordable monthly pricing starting as low as $25/month for 5-15 users.

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