PIC Reports: America’s PTO Problem

When was the last time you took a vacation? Does your employer support taking time off or is it frowned upon? When Becky or De’Aaron take a day off work, what do their co-workers say about them when they are not around? Does it seem like those who never take time off receive special treatment, i.e.,promotions? And those who take time off are viewed as disloyal, unproductive or even slackers? Why does America and it’s workforce seem to have a problem with vacation and PTO?

*we will be using PTO and vacation interchangeably*

Losing A Week Of Vacation

It turns out that American employees vacation time has decreased from a high of 20.3 days of vacation in 1978 to 16.2 days in 2015.  That’s an entire week of vacation time lost!



And it’s not only vacation time.  In one study of sick time use in Connecticut, only 1/3 of eligible employees used their paid sick time.

Why are American workers using less paid time off?

To get an understanding of the paid time off problem in the U.S. we must realize there are three main issues. First, America has more hourly employees who rarely get any paid time off benefits. Second, our “professional” worker roles (white collar, IT, marketing, HR, operations and management) receive paid time off but don’t use it. Third, there is a misconception that workers who want to use their time off are not “team players” and are disengaged.

Underlying all of this is U.S. law which does not require companies to provide paid time off, companies are free to choose how much or how little they want to provide.  In this environment, companies use paid time off as a perk to attract talent, while smaller companies can keep costs down by providing less or no paid time off at all. According to Harvard Business Review (using Bureau of Labor Statistics data), 82% of those in professional management roles have access to paid time off while only 40% of those in service roles receive paid time off.

Lack of Paid Time Off Has Serious Implications in the Workplace

At all levels of the organization and in all roles, not taking time off from work has serious implications such as employee burn-out, decreased productivity and engagement, depression, and increased illness. And in some industries, fatigue which increases the chances of workplace injuries and incidents.

Here are some benefits of Paid-Time off benefits:

  • Taking a vacation increases your effectiveness when you return by up to 80%
  • It’s good for your health and decreases the likelihood of heart attacks
  • Vacations helps the economy. If Americans took their vacation, the economy would gain an estimated $160B

The effects of lack of access to paid sick time are even more serious:

  • Employees without paid sick time are more likely to come to work ill and infect the rest of the workplace causing loss of work time and disruptions to the business.
  • Not having paid sick time effects employees’ ability to keep their jobs and take care of their finances. Without access to paid sick time employees must choose between taking care of a sick child or getting paid for that day’s work.
  • Employees without paid sick or disability leave may end up returning to work too soon resulting in complications from major medical procedures and causing higher medical costs than if they had just stayed home.

What Can HR Do?

Let’s begin with education and analysis. First, it is totally legal in most states for companies to require mandatory vacation. (source)

Next, there is a tangible cost saving to the company’s bottom line. The myth, that employees who use their vacation time are slackers who cost the company money in lost productivity, is false. In fact, according to this article on Time.com, by Kerri Ann Renzulli, sites research that says on average a company saves $1900 per employee who uses their vacation time. Also U.S. companies carried over $65B in accrued time off debt from 2014!

Here are some additional research sources around the benefits of paid-time off.

Center For American Progress Report on Paid Time Off

Project Time Off

Bureau of Labor Statistics

When Work Works (note: this is around flexible work places but still full of great data)

Encourage Employees To Take Time Off

Not only should companies strongly encourage employees to use their paid-off , they may want to consider mandating it.  More and more employers are mandating vacation time (Netflix, HubSpot, and Evernote)and some companies have started offering unlimited time-off as a fringe benefit (General Electric).

There is a huge disconnect between perception and reality when it comes to paid time off at work. 93% of managers surveyed believe that taking time off work is important for their employees. But 68% of non-manager employees say they hear “nothing, negative, or mixed messages about taking vacation.”

Human Resources must sell the benefits of paid time-off and vacation time to the C-Suite Executives from a cost  analysis standpoint and the support the financial savings with the intangible benefits such as increased employee engagement and morale.

Final note: Employees are brand ambassadors so, if companies allow and encourage paid-time off an vacation, those employee will become more loyal and promote the corporate reputation and brand wherever they go. Which makes your company the employer of choice in the community.


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