How Unused Vacation Time Impacts Staff Engagement

Twenty years ago, many Americans in the workforce used the vacation time available to them, taking the equivalent of about one month off every year. However, in the past few decades, Americans have slowly taken less time off and opted to spend more days in the office.
The U.S. Travel Association’s Project: Time Off conducted a study to learn more about how Americans use vacation time — and why so many Americans don’t take advantage of their earned vacation days. Project: Time Off’s latest study showed that in 2015 Americans used an average of 16.2 vacation days per year, a full week less than the average from 1978 to 2000. More than half of the workers surveyed (55 percent) left vacation days unused in 2015. Those unused vacation days add up to some staggering numbers. Americans left 658 million vacation days unused, and 222 million of those unused vacations days cannot be recovered.

The study proves that the majority of Americans are leaving vacations on the table. But why? According to Project: Time Off, there are a few reasons:

  • 37 percent of respondents cited returning to too much work as a deterrent to using vacation time.
  • 30 percent believe no one else can do their job while they are gone.
  • 28 percent believe it’s harder to get promoted if you take too many days off.

The Impact of Unused Vacation Time

You can’t force employees to use all their vacation time, but your team’s unwillingness to take days off could have an impact on your company culture and overall staff engagement. Here are a few ways unused vacation time can actually hurt your company:A lower retention rate. Happy employees are more likely to stick with their jobs through ups and downs, helping to lower retention rates and reduce costs associated with hiring. According to the Society of Human Resource Management, “direct replacement costs can reach as high as 50-60 percent of an employee’s annual salary, with total costs associated with turnover ranging from 90-200 percent of annual salary.” It’s obviously cheaper to retain your current employees and invest in their future. Creating an environment that encourages taking time off can improve your financials and keep your employees happier.Lower productivity. After a while, burnout makes it hard to focus on tasks and stay productive. When employees leave vacation days unused — or end up working remotely from vacation destinations — productivity takes a hit. Paired with the right employee engagement software, a healthy vacation strategy will help employees feel motivated to give their best.Lack of collective intelligence. When employees won’t take time off because they believe no one can fill in for them, it reduces the spread of knowledge across your organization. Vacation time can prevent your team from becoming dependent on one or two individuals. It also encourages employees to share knowledge with one another and across different departments. Stymied creativity. When your team is so bogged down in daily tasks that they won’t stop for a few days’ rest, it’s not likely they will come up with ideas that can improve your product or service. It’s amazing how often employees come back from a break feeling refreshed and willing to share ideas that will improve your business.Unexpected costs. If you don’t encourage your team to use all of their vacation days, your balance sheets will start to look out of whack. When employees accrue vacation time and don’t take it, it opens you up to financial liability. In some states, it’s illegal to impose a “use it or lose it” policy, and if your employees quit, you might be required to pay them for their accrued time off.

Encourage Vacation Time to Increase Staff Engagement

While you can’t necessarily force your employees to take time off, you can provide some incentives. Make sure your employees understand their vacation packages and how many days they are able to use each year. Create a workflow that will make it easier for employees to work ahead or avoid returning from a relaxing time off only to feel overwhelmed by a mountain of responsibilities.With proper planning and knowledge sharing, every employee should be able to take time off without having to work overtime on the front and back end of a vacation. Interested in learning why your employees might not be using their vacation time? CultureIQ can help you better understand your employees and their motivations. Learn more today!