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Unused Vacation Days Can Be Detrimental

Taking paid time off is important for morale and 'inspiring creativity'

At organizations offering paid-vacation plans, most full-time employees (86 percent) have sufficient tenure to accrue from six to 20 vacation days annually. But many fail to take all their leisure days, which can negatively affect performance and morale, according to a survey by the Society for Human Resource Management (SHRM) in collaboration with and commissioned by U.S. Travel Association, a trade organization.

The survey,Vacation's Impact on the Workplace, was conducted Aug. 22 through Sept. 5, 2013, with a randomly selected sample of SHRM members. Among the findings:

What type of vacation-benefit plans do organizations offer? Slightly more than one-half of organizations (55 percent) offer paid-vacation plans, while the remaining 45 percent offer paid-time-off plans that combine vacation and sick days.

Average number of vacation days accrued annually by employees at organizations with a paid-vacation plan
1-5 days3%
6-10 days17%
11-15 days40%
16-20 days29%
21-25 days6%
26 or more days5%

For organizations with a paid-vacation plan, how many vacation days are provided to new full-time employees? New employees with one year of service receive an average of 11 paid vacation days.

New employees: Number of vacation days for one year of service

Rollover Practices

Do organizations with a paid-vacation plan allow employees to roll over vacation days from one year to the next? Overall, 61 percent of organizations report that, on average, employees have at least three unused vacation days each year. Most organizations (62 percent) let employees roll over vacation days—54 percent allow limited rollover days, and 8 percent provide unlimited rollover.

More than one-third of companies (38 percent) require employees to use all of their vacation days each year or lose them.

“We found that the ability to roll over time off determined whether employees took all their vacation time,” said Evren Esen, manager of SHRM’s Survey Research Center. “Many employees seem to want to reserve vacation time, saving it for the next year, if they are able to roll over time from year to year.”

Among organizations with a limited rollover policy, 56 percent allow 1-10 vacation days to be rolled over annually.

Average number of unused vacation days for full-time employees
At organizations where employees are required to annually use or lose accrued vacation daysAt organizations where employees may roll over a limited number of days
0-2 unused days64%26%
3-5 unused days31%39%
6-8 unused days4%19%
9-11 unused days0%10%
12+ unused days1%5%
Only organizations with a paid-vacation plan were asked this question. Employers that offer unlimited vacation were excluded.

Vacation's Bottom Line

Do HR professionals think that employees taking vacation is important for measurable employee outcomes? A large majority of HR professionals (from 88 percent to 94 percent) think that taking vacation is either "extremely" or "very important" for a variety of factors related to talent management, including morale, wellness, performance, retention, a positive culture and productivity.

Fewer, although still a majority (70 percent), believe that taking vacation is "extremely" or "very important" for inspiring creativity.

Recommended Actions

“It is important for managers and company leaders to see the value in employees taking a vacation,” said Lisa Orndorff, SHRM’s manager of employee relations and engagement. “They should also encourage their people to use their leave, ‘unplug’ if possible and take a break from the work, even if it’s just a day or two every few months.”

Based on the survey findings, SHRM's research analysts advise HR professionals to take the following steps:

    • Know the numbers. Since HR practitioners overwhelmingly agree that it is important for employees to take vacation, it would be valuable to know how many vacation days they are using and whether they are neglecting to take R & R time. If employees are not taking vacation days, find out the reason.
    • Take a lead. Make sure the vacation policy fits with your organization’s culture and that the policy is being communicated and applied accurately and fairly throughout the company.
    • Understand your employees. Many employers are doing more with less in the current economy. This could mean that your employees have greater workloads and are taking on more responsibility. Managers and leaders should encourage employees to take vacation and ensure that workers do not think there is a stigma associated with requesting leisure time.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

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