This is the final article in a multi-part series about offering paid time-off in small businesses (Check out the first and second article here). This article looks at how small businesses can use innovative approaches to time off to engage employees.
In the past, Americans enjoyed taking more than an average of 20.3 days of vacation each year. But that started to change in 2000, when vacation usage began a steady decline. According to the 2016 State of American Vacation report, in 2015 American workers used on average 16.2 days of their 21.5 earned days of vacation.
According to the Society for Human Resource Management, 46 percent of small businesses offer less than ten paid vacation days per year. Regardless of the number of days employees receive as part of their paid time off benefits, why aren’t they using the vacation days they’ve earned? Data collected by Project Time Off indicates a variety of reasons for this behavior:
Time-off models need to meet the needs of employees as well as employers. It shouldn’t break the business if an employee takes a few days off, and the time away should positively impact the employee’s well-being.
When looking at the data about the number of unused vacation days, it may be tempting for an employer to think that unused vacation is a good thing – more time to finish projects and deliver results. But the opposite is true.
Employees may not use time off, but that doesn’t mean they don’t want it.
As we mentioned in the first article of this series, employees may not use all of their time-off but according to the Society for Human Resource Management (SHRM), when it comes to what employees want from their employer, time-off “ranks near the top of employees’ preferences even above cash bonuses, modest raises, and future career advancement.”
“If you look at the ingredients of a satisfying life, what our data show is that people are shortchanging themselves in the areas that may be most important,” said Erik Helzer, assistant professor at Johns Hopkins Carey Business School. “The lesson is that you have to be intentional in carving out the time you want for the things that you want.”
In fact, 80 percent of employees surveyed in the 2016 State of American Vacation report said that if they “felt fully supported and encouraged by their boss,” they would take more time off.
Small businesses can get creative about flexible work options.
While small businesses may not be able to offer employees 21.5 days of paid time off, or guaranteed days off during the holidays, these companies may be able to offer other flexible schedule and time-related benefits for employees that will help increase engagement and overall employee satisfaction.
Examples of other “time off” benefits include allowing employees to:
• Telecommute on a regular basis
• Leave early for personal and family obligations
• Work a flex schedule (e.g., four ten-hour days)
For small businesses with smaller employee populations, managing these types of flexible arrangements may be easier than including a huge number of paid time-off days as part of their benefits plan, or dealing with the difficulty of covering employee work when they take time off for a holiday or vacation.
In a small business environment, it’s difficult when employees are not at work. There’s often no extra help, and someone being away from the office can impact the bottom line. If your business doesn’t face much competition when trying to hire new staff, not offering a lot of paid time off may not be an issue. However, if an organization is competing for top talent, attractive benefits package which includes paid time off (or the flexible work options mentioned above) is paramount.
Paid time-off attracts top talent and engages employees.
Aside from attracting talent, employee wellness is also an important consideration when it comes to paid time-off. Employees need breaks, time away from work, and the ability to recharge in order to do their best work.
“When I was in my 20s I worked for a European company that gave us five weeks of vacation per year, with one week mandatory between Christmas and New Year’s Day,” says Paul Trowe, CEO of Replay Games.
“The company put my health and happiness over the job because they had a serious interest in my well-being. They told me flat out that if I was a happy and healthy employee, then the company would be happy and healthy.”
Now Trowe extends the same paid time-off benefit to the 35 employees in his company. Employees at Replay Games receive five weeks of vacation, with one week of mandatory vacation between Christmas and the New Year.
Time off is a two-way street.
Communicate that time off and flexibility is a benefit you offer and a way you’re helping employees create balance in their lives. That time away has a positive impact on job satisfaction, retention, and even overall engagement. But the arrangement must be mutually beneficial. As you invest in providing these options for employees, they need to invest in the company mission and perform at a high level so that company can continue to deliver results.
When employees can take paid time off from work, they return feeling renewed, refreshed and ready to contribute to the organization. If a small business thoroughly examines the options, creates a plan that works for the business and employees, and tracks time off in an efficient system such as Kin’s online platform, everyone will reap the rewards.