The Unlimited Time Off Trend

At CaptureLeave, since our focus is on vacation tracking and attendance management, we find ourselves checking out the latest trends in employee vacation and time off. We recently talked about the concept of unlimited vacation time, where employees have a bank of time. That time isn’t limited, as the name implies, and while they do have to request time off and have it approved, they can take the time they want and need.

While some businesses find that it’s beneficial because it allows employees to feel like they have a good sense of work-life balance, as well as freedom and autonomy, it’s not necessarily always a good thing.

One of the biggest problems a lot of companies run into is that employees aren’t taking any time off at all, or they’re taking off minimal time. This is especially true when employees work in a fast-paced or highly competitive environment.

While the technicalities of the vacation policy may say it’s unlimited, the culture may say something else. A lot of times, when things are as flexible as an unlimited time off policy, employees don’t feel comfortable taking that time available to them. This can lead to problems such as burnout, productivity declines, and disengaged employees.

A report from Project: Time Off Coalition showed that between 2000 and 2014 the number of vacation days taken by U.S. workers went down significantly from the previous average of 20.3 days to 16 days. In 2016, percent of employees had unused vacation time according to the same report.

Another trend that seeks to alleviate these problems is mandatory vacation. Mandatory vacation time is becoming popular at the same time unlimited vacation policies are as well. So what’s the deal with mandatory vacation time, and is it something a business should consider?

An Overview of Mandatory Vacation Time

The idea of mandatory vacation time is pretty simple and straightforward. Employers require that employees take a set amount of time off work each year. The idea of mandatory vacation time isn’t necessarily new. In the financial industry, it’s often used as part of fraud protection strategies. The idea is that when employees take time off, it’s easier to see if there are areas of fraud happening within the business. Often when employees in the financial industry are seen as never missing a day of work, it can become a red flag for fraud.

Outside of the financial industry, mandatory vacation time is a newer idea.

It lets employees take time off without feeling guilty or like they’re letting their employer down. It helps ensure employees get the benefits of vacation as well, such as more productivity and happiness. Employees don’t have to worry about a gray area where their employer says they have vacation time, but it doesn’t seem like anyone’s ever using it.

What Are the Benefits of Mandatory Vacation Time?

Some of the primary benefits of mandatory vacation time are touched on above—first and foremost, in a business with a competitive or seemingly cutthroat corporate culture, it can be valuable to have mandatory vacation time. Employees don’t have to worry about feeling judged or like they’re doing something wrong if they take time off. This, in turn, can be helpful for ensuring employees stay productive and engaged thanks to the benefits the vacation time brings.

It’s estimated that if employees took just one extra day of earned leave each year, the economy would benefit from an additional $73 billion in output.

It can also be easier to plan for time off when vacation time is mandatory. While you still may have employees request time off in the traditional way, there are fewer variables, and it can make it easier for the employer to do the necessary forecasting to ensure they have coverage.

There’s also a financial element for employers to think about. When employees are stockpiling their time off, the employer may end up having to cash out if they leave. Some states have laws requiring it.

For employers that are focused on recruiting top talent, the idea of mandatory vacation can be compelling as well. Even if your business can’t afford extravagant benefits packages, mandatory vacation time tends to hold appeal for employees who do want work-life balance, and who want to work for a company that shares their values.

What Are the Downsides of Mandatory Vacation Time?

Of course, as with anything, there are not just positives of mandatory vacation time. There are negatives to be aware of as well.

One of the biggest issues a lot of employers face when weighing this scenario is how they’ll actually enforce it. How do you enforce that someone takes time off if they don’t want to? Are they punished for non-compliance?

Some companies have gone the other route and reward people financially for taking their vacation, but this may not be an option for all businesses. It’s also important when trying to initiate mandatory vacation time that employers think about what happens when workers actually take their time off.

What are the processes that are used to make sure things are taken care of in a timely way when employees are off, and that they don’t return to a staggering workload?

There’s also the argument that employers may not be able to hire as many people as they’d like to if they’re responsible for their paid vacation time a few weeks every year. If an employer started having mandatory vacation time, they might also be more compelled even inadvertently to hire more part-time workers to avoid it. Of course, currently there’s no mandate that employers have to do this, but even if it was something adopted voluntarily these downsides could happen.

Overall there are pros and cons to mandatory vacation time. In some businesses, it may not be an issue and employees may be more than happy to take their vacation time. In some businesses, it’s a real problem, however, and mandatory vacation time is one option being looked at to solve problems that most often occur in highly competitive workplaces.