Tips for Creating a Great Vacation Policy

Jennifer McClure

One of the key responsibilities of talent advisors is to keep their finger on the pulse of trends related to their workforce’s changing needs. This helps the companies they work for enact policies that will attract and recruit new talent, as well as retain their current talent in order to meet business needs.

Apart from higher wages – which no one is ever likely to turn down – one of the biggest employee concerns is paid time off. And according to research from Project: Time Off’s State of American Vacation 2018, it seems employers are starting to hear the message.

The study found that 52 percent of workers left vacation days on the table in 2017. This is a large amount of forfeited vacation time, but it is an improvement from 2016 (54 percent) and 2015 (55 percent).

There is a clear correlation between vacation time used and employee happiness – with workers who used more than 75 percent of their vacation days reporting greater happiness with their company, their job, and personal relationships and physical health than workers who took less than 75 percent of their allotted PTO.

Why Not Take a Vacation?

The benefits of some well-earned time off are clear, so why do so many workers still leave vacation days on the table each year? In many cases, it’s because of a competitive corporate culture.

Project: Time Off found that employees who were concerned about appearing less dedicated if they took a day off were much less likely to use all of their vacation time. Of these workers, 61 percent forfeited vacation days, compared to 52 percent overall.

Similarly, 57 percent of employees felt their workload was too heavy to take a break, and 56 percent of those who worried that important tasks wouldn’t be covered in their absence opted to leave PTO on the table.

So, how are business leaders and talent advisors getting creative to address the fact that employees desire more time off — but seem reluctant to take it?

4 Vacation Policy Ideas to Encourage Work-Life Balance:

  1. Unlimited Vacation
    Popularized by Silicon Valley startups and some high-profile companies, only a small percentage of companies have been brave enough to offer unlimited vacation time — a situation in which employees can take as much time off as they want, as long as their work gets done. 
  2. Mandatory Vacation
    Unlimited vacation may sound like a simple concept, but it can lead to some unexpected outcomes. In some cases, employees actually feel more pressure to take less time off than their boss or others on their team. To address this, some employers have provided guidelines in regard to how much time is “typical” or “expected,” or have moved to requiring or incentivizing minimum vacation time amounts. For example, Evernote encourages employees to take at least a full week of vacation at a time by offering a $1,000 bonus for doing so.
  3. Paid Vacation
    If your employees are stubborn and still won’t take time off, follow the lead of companies like FullContact, which pays employees $7,500 to go on vacation (on top of their paid vacation) – but only if the employee commits to disconnect and not work while on vacation. Or Steelhouse, which reimburses employees up to $2,000 of vacation-related expenses each year.
  4. Summer Hours
    One less-extreme option that is growing in popularity is offering employees summer hours. According to a survey from researching and consulting firm CEB, 42 percent of companies officially sanction workers getting a jump on the weekend – up from 21 percent in 2015.

To attract and retain top talent today, companies have to continually evolve the pay and benefits they offer and consider how they can build a workplace that not only facilitates employees being as productive as possible while on the job, but that also encourages them to disconnect and recharge in order to maintain their sanity, relationships and enthusiasm for the work. Considering how your organization can meet the desire for more time off – and actually get employees to take it – may be the ticket to increased productivity, profitability, and success.

Looking for more creative ways to attract and retain top talent? Check out the best employee benefits to offer.

Jennifer McClure is a sought-after Keynote Speaker and Executive Coach. She combines her experiences as a Business Leader, Human Resources Executive and Executive Recruiter with an engaging, entertaining and informative style to help Leaders unleash their potential and create massive positive impact. Jennifer has delivered over 200 keynotes, workshops and corporate training classes, where she shares a blend of inspiration, “how-to,” best practices and strategic discussion based upon her 25+ years of experience leading human resources and talent acquisition efforts and working with senior executives.




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