How Taking Paid Vacation Time Benefits Employees and Employers

Portrait of smiling family walking on the beach when the employees uses their paid vacation time

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Vacation Benefits Everyone

When employees take a paid vacation, both the employer and the employee benefit from employees using their paid vacation time. Americans receive (on average) less vacation time than European countries.

For instance, Austria has between 25 days of mandatory vacation (which jumps to 30 if you've been there 25 years), plus, 13 holidays. All paid. Estonia has 20 vacation days, plus 11 paid holidays, for a total of 31. And what about our linguistic parent, the United Kingdom? 28 days of vacation time, no paid holidays required. And, the United States? Zero.

By law, your employer doesn't have to give you any paid time off—not for Christmas, not for a beach trip, not for anything. Most companies do, however, and the average worker took 16 days of vacation in 2013.

So while the US isn't reaching European levels, paid vacation time is available. Just how should you use it? You can use your vacation in any way that you want, but some ideas are better than others—for the employee and for the business. Here are ideas about how to use paid vacation time.

Employers Benefit

The employer experiences several significant benefits when employees take extended vacation time. It is your opportunity to take a look at how the employee is performing on the job through the eyes and access you provide to another employee.

The US government strongly encourages (although it does not legally require) bank employees to take vacations. Why? To prevent fraud. Former criminal and current security consultant, Frank Abagnale, explains why in his book, "The Art of the Steal: How to Protect Yourself and Your Business from Fraud, America’s #1 Crime."

"[M]ake people take vacations, especially the ones who handle your money and transaction records. Every employee has to be out of the office and without control over transactions for at least one week a year. Large embezzlement schemes, as I have already pointed out, often must be maintained daily, and key figures in the scheme will resist being away. [If key employees never take a vacation,] find out why."

Dan Lewis, at "Now I Know," shared this advice and the story of Toshihidi Iguchi, whose behavior caused a $1.1 billion dollar loss. Iguchi hadn't taken an extended vacation in 11 years.

It's not that taking a vacation keeps you from becoming a thief; it's that it makes it harder to run a scam when you're not there to take care of it—all of the time.

While many jobs don't involve handling money directly, every job has the potential for errors to build up. Having each employee out of the office for a week (or more) without the ability to handle emails or log in to their computer means that another employee has to handle it. That allows management to find out about performance problems and other issues before they grow too large.

That's why when employees take a whole week or more of vacation every business can benefit. (At a minimum, employee vacation time forces you to cross-train employees and ensures that you have a backup plan for when employees quit their job.) At maximum, what benefits the employees who use their paid vacation time also benefits you.

Employees Benefit

You can see how the employer benefits when employees take extended vacation time but can a week or two away from the office benefit employees, too? Of course.

Clinical psychologist Deborah Mulhern shared with ABC news that not only are vacations good now but if you don't take them, you'll lose the ability to relax. She said:

"Without time and opportunity to do this, the neural connections that produce feelings of calm and peacefulness become weaker, making it actually more difficult to shift into less-stressed modes," Mulhern said. "What neuroscience is showing is that we require downtime in order for our bodies to go through the process of restoration. It is only when we are safe from external stresses that our bodies can relax enough to activate restoration."

Are Long Vacations the Only Way?

No, long paid vacations are not important. What is important is the break. The "Wall Street Journal" says that what's important is the recharging:

“Psychologists and researchers have been studying how to create an ideal vacation that boosts our well-being, relieves stress that can impact our health, and helps us recharge for returning to work. Some conclusions: Longer vacations aren’t necessarily better than shorter ones. Engage in activities you haven’t done before, even if you’re at home on a staycation. And end a trip on a high note.”

A short vacation can recharge you, as long as you aren't just cleaning out your basement or helping your parents move into a nursing home. That's a break from work, but not a break from stress and that's what you need. You need that downtime to recharge and focus on your job.

How Employers Can Encourage Employees to Take Paid Time Off

As an employer, you have ways that you can use to assist your employees in taking advantage of their paid vacation time, including floating holidays. It behooves you, because of the above noted positive effects that employers and employees experience when employees use their paid vacation time, to make use of these ideas.

Some companies (and many government jobs) allow employees to bank an unlimited amount of vacation time. When you quit, you get all of that accumulated vacation time paid out in cash. While lots of people love this idea, it's not healthy in the long run. Employees need to get regular vacation time off.

Rather than offering employees vacation time accumulation, companies should do two things:

  • Limit vacation accumulation and rollovers. While it isn't always practical for every person to use their allotted vacation time every year by December 31, you need to encourage employees to use paid vacation time and not reward them by allowing them to hoard it. Limit the number of days that will roll over into the next year.
  • Provide paid disability leaves. One of the reasons people hoard vacation time is so that they can afford to take time for a baby, or surgery, or an unexpected problem. Companies should think about how best to meet their employees' needs for these events without having them burn out when they never get a reasonable break from work.

Employee Dos and Don'ts

Employees should not do the following when using paid vacation time.

  • Work. It is tempting to call into that meeting and respond to all emails, so you don't get behind, but then you're not on vacation, you're just working from somewhere else.
  • Go into debt. You don't need a fancy trip to Disney World or the Caribbean to have time off count as a vacation. If you go into debt for your vacation, you're added stress back into your workday. It's better to do a staycation and go to the park than it is to accumulate debt in your attempt to relax.
  • Use all vacation days for other obligations. You're a good child, so you want to help out your aging parents, or move your child into their new dorm room at college. These activities are great—and essential components of every person's life. But, if you use all of your paid vacation time to do other work (including cleaning your own basement), you'll never get that chance you desperately need to relax.

Employees should do the following when taking paid vacation time.

  • Something fun. It's not relaxing if you're not having fun. What that fun is, varies from person to person. You may love hiking while another person may see that as a fate worse than death. What's important is that you break your routine.
  • Use your allotted vacation time. It's part of your compensation. You'd never voluntarily give up a chunk of your salary, but that's precisely what you are doing when you work for free—which is what employees who have use it or lose it vacation days do.
  • Encourage your coworkers/employees to take their vacations. If you want a great vacation, then cover for your coworkers when they are out of the office. This makes it easier for everyone to take great vacation time when you have a supportive team.

Vacation is actually a critical part of a good work-life balance. Make sure that you take your paid vacation time. Turn off your phone and have a good time.


Suzanne Lucas is a freelance journalist specializing in Human Resources. Suzanne's work has been featured in notable publications including "Forbes," "CBS," "Business Insider," and "Yahoo."