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Why Successful Businesses Should Mandate Paid Time Off for the First Time Ever

Some employees always seem to be looking for creative ways to get more paid time off. Some of us, however, have the opposite problem. We never seem to be able to find the “right time” to take our PTO. Maybe we’re afraid we won’t seem as hard-working or valuable to our employers if we take a vacation. Maybe we just forget. But whatever the reason, we are hardly alone.

Since dropping significantly after World War II, the number of weeks that U.S. employees take off on average has been steadily rising for almost 70 years. Fast Company reports that 54 percent of employees now have unused vacation time, even though the United States is a world leader for fewest vacation days offered. That might make it seem like American workers are being more productive. Unfortunately, it isn’t true.

Taking time off can be good for employees and their employers. When workers get away from work for a bit, it can raise morale, boost productivity, reduce costs, and even protect against fraud and theft. Workers who use their PTO are less likely to experience burnout and require fewer sick days. Despite all these benefits, however, too many American workers don’t take advantage of paid time off. In order to keep their employees as productive as possible, many employers are now experimenting with making paid time off mandatory.

From an employer’s perspective, it may feel counterproductive. Why would you force employees who want to work to stay away? Surprisingly, allowing them to keep working may actually hurt your bottom line.

Research suggests that as the average workweek goes past 40 hours, employees become less productive, according to workforce analytics platform Visier. A growing body of study indicates that, at some point, all workers get tired and need rest. When employees accrue vacation time and don’t take it, that starts to show up on your books as a liability. Embezzlers and other workplace criminals are more readily unmasked when someone takes over their work while they are on vacation. A 2016 study by the Association of Certified Fraud Examiners found that mandatory vacation and job rotation policies reduced average losses to companies victimized by fraud by 48 percent, from $170,000 to $89,000.

Employee vacations can benefit your workforce in other ways, as well. When workers are gone for weeks, it allows for valuable cross-training of your other employees, allowing less experienced or siloed workers to gain important know-how or even shine in a new role.

Other nations may have caught on already. The United States is the only major advanced economy with no national requirement for paid vacation. By comparison, European Union employers must offer at least four weeks a year. If you’re not ready for that, a good start is instituting a use-it-or-lose-it vacation time policy. Another way to encourage employees to take a break is simply to explicitly tell them it’s okay—Often, their reluctance is due to the culture of their workplace.

If that doesn’t work, it may be time to begin experimenting with mandatory paid time off for each employee. Many employers across the U.S. are now developing vacation savings plans that allow employees to bank vacation time with matching employer contributions, just like a 401K plan. You might find that it saves your business money in the short term and boosts productivity over the long haul. It may well prove to be a popular move among employees—even if there are never enough vacation days for some.

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