Jr. Staff Accountant
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Why You Should Actually Use Your Vacation Days

Oct 4th 2017
Jr. Staff Accountant
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scrooge worker productivity

Did you know that 54% of us don't use all of our allotted paid vacation days? 

Whether it's a fear of being judged, or replaced, (by younger, hungrier workers or even AI technology?) we just seem to keep showing up diligently for work every day; and that's not always a good thing, as working long hours has been shown to decrease productivity.

Unused vacation days are not only damaging to employee morale and company culture, but also to your company's bottom line.

Why Aren't Employees Using All Their Vacation Days?

Fear is the underlying reason why workers won't use all their paid holidays. They are fearful they will fall behind on their work, that their manager will view them as not being dedicated to their job, or that no one else can do their work while they're gone.

If you've noticed a significant number of your employees have not utilized all their work vacations, you should be taking measures to encourage employees to take all their days off. When employees use all their vacation days, great things happen for them and the company.

Using Vacation Days: Good for Company Culture

IBM's Watson (AI) may be good at indefatigably processing data, but he's not much of an asset to your company's culture. (and he doesn't even show up to the Holiday party... Scrooge!) 

The actual humans who do shape your company's culture are proven to be happier and much more productive when they have balance in their lives, and using vacation days can help. 

Your company's vacation policy can actually help set a precedent for each individual's essential, "work-life balance."

Encouraging work-life balance in your company can create a more trusting and open environment for your employees. This will encourage better relationships between teammates and managers.

Having a generous work vacations policy is also an easy way to attract more talent. This is especially important if your business is in a hyper-competitive talent market. A generous policy along plus a culture promoting work-life balance will help you attract great talent.

Well-Rested Workers Are Productive (and Happier)

There are scientifically-backed reasons for employees to use all their work vacations.

One reason is sleep. A study in 2011 estimated that American companies lost over $63.2 billion dollars on lost employee productivity. That's a lot of money!

Stanford even created a formula showing that those who work 60 hour week are 1/3 less productive than those who work a 40 hour week. In other words, working long hours produces diminishing returns.

By encouraging employees to take relaxing vacations, you're encouraging them to relax and catch up on sleep. Employees will return to work recharged and ready to be productive.

Sleep can also help reduce stress, thereby improving employee output and ability to work through problems.

Increased creativity is another reason to encourage work vacations. Studies have shown getting a change of scenery, especially in natural settings, can increase creativity by 50%. The change of pace allows neurons to form new connections in your brain and allow you to see things from a different perspective.

An increase in creativity can lead employees to find solutions to long-standing issues. Creativity plus the boost in productivity will result in more profits for the company.

Reduces Employee Turnover

It should come as no surprise that happy employees are less likely to leave their jobs. Employees who are happy and have good relationships with their managers will be highly satisfied with their jobs. They're less likely to leave than employees who don't exhibit these characteristics.

If you have an environment with little employee turnover, you'll notice a boost in overall company morale. The happiness and job satisfaction from employees who take their work vacations will rub off on others. You'll notice more people feel they can take vacations and return to work ready to be productive.

Low employee turnover is also good news for your books. Employee churn is expensive. Each company's cost of employee turnover is different, but you can estimate it with an easy formula.

When you can hold on to employees longer, the annual cost of hiring, onboarding, training, and wasted effort goes down.

Lowers Your Healthcare Costs

There are plenty of ways to encourage and reward your employees for adopting healthy habits. Provide free healthy snacks, subsidized gym memberships or reward biking to work.

These perks all contribute to a happier workforce.

Healthcare is one of the first lines of your books you'll notice start to go down when you encourage your employees to take more vacation days.

When employees get the change to relax and catch up on sleep, they're giving their immune systems a chance to strengthen.

This will help them fend of office-borne sicknesses and reduce the number of healthcare costs on your end. It can also reduce stress-induced illnesses like heart attacks and repetitive stress injuries.

Reduce Unexpected Days Out

Encouraging employees to take work vacations will also help reduce the number of unexpected days out from your employees.

First, if your employees are healthy, they won't need to call out sick as frequently. This leads to less lost productivity and means teams won't need to scramble as much to cover someone's workload.

Second, by rebalancing the work-life culture in your office, fewer employees will call out "sick" for a mental health day. Ideally, you want a culture where employees don't feel afraid to plan mental health days ahead of time rather than lying and saying they're sick.

Lowers Your Balance Sheet Liability

Some companies allow employees' unused vacation days to expire at the end of the year, while others allow employees to carry days over into the new year.

While rolling over days might seem like a good idea, it can discourage employees from using all their days in the calendar year. This encourages employees to stockpile vacation days like over-worked squirrels; and nobody needs a bunch of giant, burned-out metaphorical rodents in the office holding 5 years of vacation days over your head like the sword of Damocles. (No matter how fluffy their tail looks) 

Also, the practice of hoarding vacation days can cause unused holidays to build up as a liability on your balance sheet. This liability makes planning more difficult and could also prove difficult to deal with if several employees leave at once.

Use Those Vacation Days!

American workers need to have a serious discussion about work holidays and get over their fear of using the vacation days they have earned.

Encouraging employees to use all their paid vacation days fosters a better company culture. It also makes your employees healthier and more productive, and increased productivity means a better return on your investment.

Plus, a more stable employee base makes financial planning for the company much easier. Low and stable employee turnover rates and lower carryover liability are easier to predict than erratic employee behavior.

So, get started on encouraging your employees to actually use their vacation days -- for their benefit and yours!


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