They say time is money, and it’s true: Americans collectively have $224 billion in accumulated vacation time at private-sector corporations.
A new report commissioned by the U.S. Travel Association says this massive amount of unused vacation time, nearly half the size of the federal deficit, can languish on companies’ books for months or years. “The average vacation liability per employee totals $1,898, and in some companies studied is more than $12,000 per employee,” the report says.
The USTA says there are indications that this practice is increasing. “It’s telling that the liability grew by $65.6 billion from 2014 to 2015,” says Cait DeBaun, spokeswoman for the association’s Project: Time Off initiative. “This isn’t surprising, as Americans are taking the least amount of vacation time in nearly four decades.” (The USTA’s mission is to get people to take more vacations.)
When we don’t use our vacation time, it’s the equivalent of leaving money on the table. We forfeit more than $52 billion in unused time off (rollover days that expire, etc.) every year, and American workers roll over an average of more than a workweek from one year to the next.
Surprisingly, those who work for the smallest companies roll over the least amount of vacation time: People who work for companies with fewer than 100 people roll over an average of less than five days, while people at companies with five or fewer people only roll over a couple of days each year. (It’s possible that people at smaller companies might get fewer vacation days and have less to roll over.)
But American workers should pay attention: More companies are stopping the practice of letting workers roll over their accrued vacation and adopting “use it or lose it” policies. More than a quarter now have these kinds of policies, the report says.
In other countries, concern about the effect all work and no play has on workers’ outlook and output has leaders considering legislation to fix the problem. Japanese lawmakers are looking into a requirement that would make employees take all of their allotted vacation time. But since the United States doesn’t even have a law requiring workers get paid time off (unlike most other developed countries), that’s unlikely to emerge as a solution anytime soon.
Although 80% of workers said they would more readily use their vacation time if encouraged to by their boss, many say they don’t get the message that taking a vacation is OK. For employees stuck in a corporate culture where taking time off is frowned on, there are numerous benefits to bucking the system and taking the time off to which you’re entitled. HR experts say forgoing vacation isn’t just costing us money, but it’s taking a toll on our mental health, as well.
The Society for Human Resource Management says three out of four HR pros say people who take most or all of their vacation perform better than those who take less. “Happy employees are more likely to stay in their jobs, helping employers keep talent in place and turnover costs down,” the report says.