A Little Vacation Can Increase Employee Productivity

Nearly one of every three American workers is vacation-deprived

For the eighth consecutive year Americans were found to receive and use the smallest amount of vacation time among their counterparts abroad, according to Expedia’s eighth annual Vacation Deprivation™ survey. 

Despite reporting an average of 14 paid vacation days again this year, the same as 2007 and two more than in 2005, an estimated 47.5 million Americans (31 percent of employed U.S. adults aged 18 and over who are employed full-time and/or part-time and/or self-employed) will not use all of their vacation days. That’s almost as much as the entire population of California and Illinois combined. Again this year, employed U.S. adults will leave an average of three vacation days on the table, in essence giving back more than 460 million vacation days in 2008. 

Despite these statistics, Americans do see the value in vacation, with more than one-third (39 percent) reporting they feel more productive and better about their job upon returning from vacation and 52 percent claiming to feel rested, rejuvenated and reconnected to their personal life. Even though they leave three vacation days unused, 92 percent of employed U.S. adults believe they are entitled to take all the vacation days they earn, and 67 percent believe their employer encourages them to use all of their allotted vacation time.

So why don’t workers take their hard-earned vacation? Work responsibilities are one of the biggest deterrents to taking vacation, with 18 percent of U.S. adults responding that they’ve cancelled or postponed vacation plans because of work. A significant 29 percent admit they have trouble coping with stress from work at some point in the vacation cycle. Additionally, nearly one quarter (24 percent) report that they check work e-mail or voicemail while vacationing.  That figure is up from only 16 percent in 2005. 

Americans lose the global tally

Expedia analyzed the vacation habits of employed workers in the U.S., Canada, Great Britain, Germany, France, Spain, Italy and for the first time, the Netherlands and Austria.  Canadians receive an average of 17 annual days, two less than 2007 but still three more than Americans.  Among the European countries studied in the past, all workers receive more vacation days in 2008 than 2007.  Great Britain has a two-day increase over 2007, with 26 days, and Germany, Spain and France all saw increases of one day, receiving 27 days, 31 days and 37 days respectively. Employed workers in the Netherlands and Austria are awarded an average of 28 days in 2008. 

Gender differences

When it comes to making vacation a priority, Expedia research saw a shift in attitudes toward taking time off among women and men.  In 2007, men were more likely to feel guilty about taking time off from work (39 percent versus 30 percent of women).  However, in 2008, women are more likely than men to feel guilty about taking time off from work (38 percent women versus 28 percent men), and men are more likely than women (16 percent versus 11 percent) to take a 2-week vacation. 

Encouraging use of vacation time leads to higher productivity, greater success

Gregg Lemley, partner with the international law firm Bryan Cave LLP, notes that employees need to take time away from the office to rest, relax and rejuvenate. The most productive, successful employees are typically those that utilize their vacation time and return to the office with a renewed sense of drive and determination.

In crafting a vacation policy, employee satisfaction and a sense of fairness should be the foundation from which the process begins. From there, HR should always consider state laws. "State laws vary widely as to what policies are permissible, particularly with regard to what happens to vacation once it has been accrued," said Lemley.

"Good vacation policies should be very detailed as to how vacation accrues, in what increments and over what time and how long the employee has to use it," said Lemley. "Good policies will say that vacation is accrued for use during that calendar year only in order to avoid large payouts on termination of accumulated vacation. Policies should discuss in detail how priority is established for vacation and how much may be taken at one time (and how little).

Encourage employees to use their vacation time

Organizations are wise to encourage employees to take vacation, not just because it is good for employee morale and productivity, but because it is a legally wise action. "For example, in some states, accrual laws make it difficult for employers to avoid large payouts on termination," said Lemley. "The other often undervalued reason to encourage employee vacation is the benefit of increased productivity and greater efficiency. Implementing a 'use it or lose it' type policy will encourage employees to take vacation during the year and will create more productive employees overall," he noted.

Potential consequences if time-off isn't utilized

"Organizations whose employees let their vacation time accrue could be faced with a large payout," said Lemley. "Large payouts for vacation time upon termination provide no benefit to the employer."

Additionally, organizations could suffer from increased use of sick-time by over-stressed employees. Employees who don't use their vacation time are often dissatisfied, particularly if they feel that they are being pressured to not take their vacation. And, finally, organizations may experience increased health insurance costs as well as workers' compensation insurance premiums.

Source: Interview conducted by CCH Human Resources Management Ideas & Trends, a product of Wolters Kluwer Law & Business, of Gregg Lemley, a Partner in the St. Louis office of the international law firm Bryan Cave LLP. Mr. Lemley practices in the area of labor and employment law, and regularly advises employers and businesses on vacation policies. Survey information from Expedia, Inc.; www.expedia.com.

Organizations are wise to encourage employees to take vacation, not just because it is good for employee morale and productivity, but because it is a legally wise action.