Vacation is that time of the year when you finally relax and disconnect from daily stress. And most people can’t wait for it! However, some can’t really afford it either due to a lack of money or time. While workers in Europe are entitled to up to 30 days of paid vacation time every year, in the U.S. companies are totally free to choose whether they want to give their workforce any paid vacation at all.
However, vacation policies play a major role in a company’s culture, having some influence over employee onboarding and retention rates too. In today’s world, when everyone loves to travel and explore, vacation perks become more and more important for both employees and employers. Let’s find out what companies can do to improve their vacation benefit policies and make them work in their favor.
Vacation advantages for employers
Offering vacation benefits to your employees is, first of all, a great retention tool. Everyone loves to travel, especially millennials. Vacation benefits – be it paid work days or extra funds – are acting as a great incentive for younger employees not only to join the company but also to keep their position for longer. Given that the average cost of replacing a minimum wage employee is about $3,700, companies actually save money by offering vacation benefits.
Besides acting as a great perk for the workforce, paid vacations can also act as a safeguard for companies. Sending employees out on vacation is a great opportunity to check on their activity, especially for the employees who are in charge of handling the money. The US government encourages bank employees to take two weeks of uninterrupted vacation in order to prevent fraud. It turns out that embezzlement schemes require daily maintenance, which requires daily presence at the office. Employees who refuse to go on vacation are deemed as suspicious. Sending them away for some time gives the company an opportunity to discover any suspicious activity. And even though most employees don’t handle money directly, there are still a huge number of possibilities when it comes to what can be hidden and potentially harmful to business.
Another reason to encourage employees to use their vacation days is the liability costs. Only in the U.S. employees leave $224 billion dollars in unused vacation days each year, creating huge liability that employers have to pay when employees leave the company. This can be catastrophic for companies that need to downsize and lay off several employees at once.
Vacation advantages for employees
Everyone needs some time off to relax and disconnect. Psychologists claim that vacations have a profound effect on people’s mental health. Even a short vacation has positive effects, making people more motivated, more creative and helping them focus on their tasks much easier. On the other hand, people who refuse to take a vacation for too long are actually at risk of losing their ability to relax and become exposed to the risks of chronic stress. People need time away from usual stressors for the brain to activate its process of restoration.
Besides health benefits, vacations give people an opportunity to analyze their lives, review their goals, and accomplish any side projects that were left aside.
If you have paid vacation days, use them wisely. Don’t get engaged into any kind of work or unpleasant and exhausting activities. Break the routine and do something fun that helps you regain your mental strength. If traveling is a possibility, use it to broaden your horizons and enjoy life before getting back to the daily routine at the office.
How and what to offer
There are several vacation benefits that companies can choose from, or even offer a mix of. From paying vacation days as regular work days, to offering fully paid travel opportunities, there is an option out there for any pockets.
Unlimited vacation policies are still rarely applied in the U.S. but the few companies that use it claim to see better work performance, with not much more time away from the office for their employees. The concept is really simple. People are allowed to take as much vacation as they need, under the condition of getting their work done. It’s a win-win situation. However, companies get an extra financial advantage: they don’t have to pay for unused vacation days when employees leave the company. That saves employers about $1,898 for each employee who decides to switch jobs.
Vacations with all expenses covered by the company are even more rare but employees really appreciate them. Companies that can’t afford to pay for full employee vacations choose a middle way: matching their employees vacation savings.
In the U.S. and Canada, companies like Vacation Fund are providing a platform through which employers can help employees pay for their vacations by matching contributions made to their vacation fund, deducted from each pay check. In other words, employees save a small sum of money each month, with the employer matching that amount. Companies can contribute as much as they like, from 10% to 100%. When vacation time comes, the employee can cash in their vacation fund and enjoy their holidays without a huge financial effort.
Everyone enjoys vacation
As we can see, vacations are beneficial to everyone. By offering vacation benefits companies keep people happy, motivated and satisfied with their jobs.
And in return, employees are more focused, more productive and work for the company for a longer time. Everyone enjoys vacations so everybody wins!