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COMPENSATION & REWARDS
Dec 10, 2013

Missed vacation days may come with a price

Performance, productivity declines seen as potential consequences
    

By Claudine Kapel

How many of your employees are looking to the year ahead, knowing they’re about to lose some – or many – unused vacation days?

While some organizations may see that as a boon to productivity, a recent survey by the Society for Human Resource Management (SHRM) found many human resource professionals feel otherwise. The survey featured responses from 481 SHRM members.

The majority of survey respondents agreed having employees take their vacations is either extremely or very important for a variety of talent management factors, including:

• performance (94 per cent)
• morale (92 per cent)
• wellness (92 per cent)
• a positive culture (90 per cent)
• productivity (90 per cent)
• retention (88 per cent).

The majority of respondents said they felt, when compared to employees who take less vacation, employees who use most or all of their vacation days each year are more likely to:

• experience higher levels of job satisfaction (78 per cent)
• be more productive (77 per cent)
• perform better (75 per cent).

About three out of five respondents (62 per cent) indicated their vacation plan allows employees to roll over vacation days from one year to the next. About one-half (54 per cent) reported their organization allows full-time employees to carry forward a specified number of vacation days, while eight per cent indicated they allow an unlimited number of rollover days.

Among those with a limited rollover policy, 56 per cent indicated they allow employees to carry forward between one and 10 vacation days.

Meanwhile, more than one third of respondents (38 per cent) indicated their vacation plan requires all vacation days to be used each year, with unused days being lost.

Not surprisingly, the survey found organizations that allowed vacation days to be carried forward reported a higher prevalence of employees not using their full vacation allotment in a given year.

Among respondents whose vacation plans do not allow vacation days to be carried forward, 77 per cent indicated most employees use all of their vacation days each year. Some 64 per cent reported an average of zero to two unused vacations days and 31 per cent reported three to five unused days.

Among respondents whose vacation plans allow for vacation day rollovers, only 31 per cent indicated most employees use all of their vacation days each year. One-quarter (26 per cent) reported an average of zero to two unused vacations days, 39 per cent reported three to five unused days and 34 per cent reported six or more unused days.

There are a number of steps organizations can take to ensure vacation entitlements are being effectively utilized.

Monitor the number of vacation days employees are taking relative to their vacation entitlement. Look for trends or patterns. To what extent are employees taking their vacation days? Are there particular departments or units where missed vacation days are more prevalent?

Revisit vacation policies if they seem to be driving undesired outcomes. If employees appear to be carrying forward too many vacation days, you may need to investigate why. A vacation policy won’t be applied if employees face barriers or management pressure inhibiting their ability to go on vacation.

Further, fostering greater work/life balance can’t just be an HR initiative if it’s to take root in an organization. Leaders and managers need to champion such values and create a work environment that enables employees to go on vacation without fear of reprisal.

Ensure vacation policies are understood and managers and leaders understand why it’s important for employees to go on vacation. To what extent are managers and leaders role modelling desired behaviours by going on vacation themselves? To what extent do they encourage employees to take vacation?

While likely every organization wants its employees to work hard, some paths to productivity don’t really lead to a happy place. Leaders and managers need to understand that optimal productivity on the job is best achieved by also ensuring employees get time off the job as well.

Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.
    
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