The Real Cost of Unused Vacation

Workload is just one of a number of reasons American workers often fail to use all the vacation time they earn each year.

According to a CNN article, U.S. employees gave up $448 million in earned but unused vacation days in 2010.

Employees frequently decline to take vacation time because they fear (A) the work won’t be handled in their absence and they’ll come back to a large amount of catch-up work or failed projects or (B) they fear that their work will be too well handled and their superiors will realize they can get by fine without them.

Following are eight reasons suggested by Ajilon Finance Solutions for encouraging your employees to regularly use their vacation time:

1. Employers may be left with a financial liability in the form of accrued leave that must be paid at time of termination, depending on state law.

2. Employees who have a chance to rest and revive are usually healthier, with less stress and fatigue, which can mean lower worker’s comp and health insurance costs for your company.

3. Studies show that workers who are rested and relaxed have higher productivity and may avoid costly mistakes.

4. Employees who are encouraged to take regular vacations are more likely to stay with their employer, resulting in better employee retention and lower costs of turnover.

5. Employees who get away from work for a while may come back with creative inspiration and fresh perspectives.

6. Employees who take vacations are often happier than those who don’t. Overworked employees may become disgruntled and “cranky,” resulting in more office squabbles and tension.

7. If overworked employees aren’t taking paid vacation days, they may need to take more sick days to deal with all the stress they are feeling.  Since sick days aren’t planned, this can result in office coverage problems.

8. According to the Association of Certified Fraud Examiners (ACFE), refusal to take vacation could be a red flag that an employee is committing fraud. Fraudulent behavior often requires complete control over a process by one person, which may be difficult or impossible to maintain if the person is out of the office for more than a few days. A required vacation could detect and even deter any existing or potential fraudulent behavior.

HR POINTER: Organizations should view vacations as part of their overall employee wellness strategies and as a key element in ensuring that the workplace is flexible and productive.

Managers should encourage the use of vacation days by taking vacation days themselves and reminding employees periodically to plan their time off so their workload can be allocated to others.

If all else fails, encourage employees to take long weekends, particularly when they feel that they can’t afford a proper vacation.

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