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3 Reasons Taking Vacation May Be Good for Business

Human Resources

Paid vacation days are a benefit most people consider as they sign onto a new job. Yet, most Americans don’t fully utilize them; American workers used only 77 percent  of their vacation days in 2013. This equates to giving up 169 million days—or $52.4 billion in benefits.

Is this work ethic something businesses should celebrate? Not quite. Encouraging employees to use their time off can actually lead to a more vibrant and dynamic workforce. Here are three reasons to encourage your employees to take full advantage of their benefits.

1. Improved Performance

Ernst & Young found that for every 10 additional hours an employee took off, their performance rating improved by 8 percent. On the flip side, vacation deprivation can cause resentment, burnout, and increased mistakes on the job.

The reason? It goes back to the importance of rest. Just as we need sleep every night to feel our best, we occasionally need time away from work in order to perform to our highest potential. Stepping out of the normal workflow and resetting the body and mind can provide motivation and more energy when employees come back to the office.

2. Healthier Employees

People who take vacations tend to enjoy both mental and physical benefits: less stress, less risk for heart disease, decreased depression rates, and more motivation to achieve goals. Simply put, healthier employees are happier and more engaged. By taking a few days of vacation, employees may actually spend more time at the office because they are spending fewer days at the doctor's office.

3. Higher Creativity

Time away from daily tasks can allow employees time for creative responses to larger business challenges. Without the day-to-day pressures of the office, workers can use the time and surroundings of a relaxing environment to see problems from a fresh perspective. One graphic designer even takes a year off every seven years to recharge.

You don't need to be in a traditionally creative field to enjoy these benefits. Creative problem solving can yield gains in all parts of the business, from administration to sales.

Encouraging Employees to Use Their Vacation

So, how can you help ensure your employees actually use their time off? Here are a few tips:

  • Let employees know their vacation balances – Employees might not request time off because they’re unsure of how much time they have and are afraid to go over their allotted hours. Remedy this by making it easy to access this information; choose a human resource management system with self-service access to accrued time-off hours to help your employees track vacation more easily.
  • Incorporate time away from work into your company culture – If your company culture values a healthy work-life balance, your employees may feel more comfortable taking time off. Examine your current culture to understand what is going on now. Do you reward employees for performance, or for long hours? How easy or difficult is it for employees to take time off? Creating flexibility around paid time off, whether employees use it for a half day or for two weeks, can help ensure employees fully take advantage of their vacation time.
  • Consider alternative vacation policies – Increasingly, companies are looking into different of structures for time in and out of the office. For example, some companies are moving from the traditional five-day work week to four 10-hour days, giving employees three days off instead of two each week. Keep an open mind when determining which framework might work for your business.

Paid vacation isn't just a benefit to employees, but also to your business. By encouraging employees to use their vacation and providing them easy access to their time-off information, you may boost productivity and creativity, reduce turnover, and make your company more attractive to top talent.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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