While a growing body of research shows that taking regular vacations makes employees happier, healthier, more productive, and less likely to burn out—a win-win for the individual and their employer—getting employees to actually take vacations is still a challenge for many organizations. One proposed solution to employees’ reluctance to take breaks is to offer them unlimited leave, but critics of this approach point out that it can backfire, discouraging employees from taking time off because they don’t know how much they are really allowed or expected to take.
To correct for that tendency, some organizations offer employees incentives to take vacations, such as annual travel stipends that they must either spend on leisure travel or forfeit. Others have taken this a step further and make vacations a requirement rather than an option. To that end, Neil Pasricha and Shashank Nigam write at the Harvard Business Review about an experiment they conducted at Nigam’s small aviation strategy firm, SimpliFlying, where they required employees to take one out of every seven weeks off, on a regular schedule. Employees were strictly forbidden from contacting the office while on vacation, losing their pay for the week if they did:
After this experiment was in place for 12 weeks, we had managers rate employee productivity, creativity, and happiness levels before and after the mandatory time off. (We used a five-point Likert scale, using simple statements such as “Ravi is demonstrating creativity in his work,” with the options ranging from one, Strongly Disagree, to five, Strongly Agree.) And what did we find out?
Varuni Khosla and Brinda Dasgupta at the Economic Times explore what employers are doing to make sure their burnout:
[C]ompanies like Adobe, Genpact, PwC, Mindtree, Lemon Tree Hotels and Thomas Cook, which have jobs that are practically 24×7, are actively tracking employees’ leave and holiday usage, offering counselling and encouraging extracurricular activities to help them disconnect from their workload. …
Pankaj Bansal, CEO of HR solutions company PeopleStrong, said every company wants its employees to be fully productive, but a workaholic is an “organisational liability”. He said companies should coach such employees on working intelligently for a better work-life balance.
Some companies are doing just that. At Thomas Cook India, employees’ attendance is monitored. Those who are seen to be regularly putting in very long hours are identified and counselled. “We have tieups with counselling centres and encourage — but not mandate—such employees to get help,” said Mona Cheriyan, head of HR. The company does not allow for leave accumulation and makes regular checks to ensure that employees use at least 60-70% of their available leave by the year-end.
It’s good to see employers taking burnout and overwork seriously as business challenges, but I wonder whether Bansal’s recommendation that “companies should coach such employees on working intelligently for a better work-life balance” is quite the right way to help them achieve better work-life balance.
Marie C Fields/Shutterstock
There is broad agreement that vacation is a good and important thing for employees. Tracking employee preferences worldwide, CEB’s Global Talent Monitor finds that the amount of vacation time on offer is one of the top ten factors employees consider when making decisions about where to work.
The problem that most people have is that they don’t take the vacation to which they’re entitled. Some recent survey work shows that more than half of American employees left vacation days on the table last year. And perhaps even worse, even when we are nominally on vacation, we are often still working (usually because our boss keeps asking for things).
To solve that first problem, employers have come up with a few different strategies, such as giving employees unlimited leave or making vacation mandatory. The latest innovation in this field, and perhaps the smartest solution to the problem of employees not taking vacations, is what Huffington Post business editor Emily Peck calls “paid, paid vacation”:
At his last job, Ian Nate worked for a company that offered unlimited vacation time. That didn’t mean he actually took a lot of vacation. Now Nate works for a small HR company that offers three weeks vacation time to new employees, but with a twist: BambooHR, an eight-year-old startup, gives full-time employees $2,000 a year to take a real vacation. The Linden, Utah-based company covers their expenses ― airfare, hotel, etc. The idea is to truly compel people to take real time away from work. …
Bamboo is one of a few companies offering what I’ve informally decided is the best job perk ever: Paid, paid vacation. Of course, there are other benefits that are more necessary like paid sick time, ordinary paid vacation days, health insurance, paid parental leave etc. And yes, the most important way an employer can compensate you is with a good salary. But really, is there a better way to truly communicate to your employers that you want them to be fully realized human beings? Free snacks and lunch ― standard perks in Silicon Valley at this point ― say, “stay at the office forever.” Paid, paid vacation says, “we want you to have a life.”
Concerns about employee wellness, the financial liabilities of unused time off, and a desire to keep up with the competition have leaders rethinking how they approach paid time off (PTO). Mandatory time off is one radical policy change executives are considering in response.
Take the case of Bart Lorang, CEO of software company FullContact. Fortune has profiled how Lorang requires staff to take 15 or more days off every year. As a warning against working on vacation, he’s put up a photo of himself on a camel in Egypt looking at his smartphone instead of the pyramids.
That story sparked a debate here at Talent Daily on the merits of mandatory PTO, and we wanted to share that debate with you…
Research Director at CEB, advocate of mandatory PTO
Recent rewards research from our colleagues shows you have to listen to your employees, not the market, to build the right rewards package. Listen to your top performers who are working all the time and they’ll likely say how very few of them ever take most or even some of their paid time off. Requiring employees to take paid time off is a logical response and one of the few tools leaders have to ensure their best talent can rest, recharge, and be more productive. No other option can do that.
For example, offering unlimited vacation may make employees more exhausted. In economics, moving to an infinite supply of a good or service drives down its price. So under an unlimited PTO policy, top talent may never take vacation since days off are so “cheap.” They’ll say “I can always take tomorrow off,” and then tomorrow never comes…
Solutions focused on increasing supply of PTO alone won’t work. We have to change the demand side and get employees consuming PTO. Putting a minimum “floor” on PTO consumption is a smart place to start. Enforcement is easier, more practical, and beneficial than other “no workaholics” policies like no email after 5:00pm. It may have an unintended upside too. Imagine if your boss’s year-end performance review were influenced by whether her direct reports took all of their vacation (and if she lost points if they didn’t). She’d have to reconfigure projects to make time off possible.