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Finding your ideal vacation policy

[Written for Replicon blog]

In 2014, a New York City councilman proposed a bill requiring three weeks paid leave for employees who had worked at a company for five years. That, plus the mandated five-day sick leave, would have amounted to four weeks of paid time off.

Despite being the legal bare minimum for every European Union country, four weeks vacation was seemingly unrealistic to the city that never sleeps, and the bill didn’t generate much excitement or support. It went to committee, and nothing has happened since then.

More than numbers:

The Center for Economic and Policy Research calls the United States the “no-vacation nation,” because it is the only advanced economy in the world that doesn’t guarantee its workers a certain amount of paid vacation days. But the issue is more complex than pinpointing an ideal number of days, according to Kenneth Matos, Vice President of Research at Life Meets Work. A variety of factors can influence how a vacation policy affects an employee, including the organizational culture, nature of the job, income level, whether the position is hourly or salaried, scheduling flexibility, and many others.

“The amount of time is, in many ways, the wrong question,” says Matos.

Matos pointed to two critical considerations for evaluating vacation policy:

1. Accessibility:

Can employees take vacation when they need it, even if on short notice? Oftentimes, taking time off on short notice can be difficult for employees in service-oriented jobs or positions relying heavily on their physical presence in the workplace

2. Quality of time:

Are employees actually using their vacation time to relax and unwind, or are they still answering work emails and phone calls? Are they spending vacation time running errands or going to appointments because they don’t have sufficient time to get these done during the workweek?

The contextual approach:

Taking a contextual approach to designing a vacation policy can help an organization become more attentive to the way the policy works, Matos says. For example, if an organization sees that employees are still stressed out despite taking time off, perhaps the solution is to examine the organization from a holistic perspective beyond the vacation policy.

“If you’re going to make a change [in your time off policy], you don’t want to make it about the company’s goals,” says Katie Denis, senior program director at Project: Time Off. “You want to make it about the individual’s well-being.”

This, of course, can manifest itself in a variety of different policies – unlimited, use it or lose it, or a rollover plan. While a few top companies are now adopting unlimited PTO policies, studies show that a “use it or lose it” approach to vacation days still has the best results for employees. Regardless, the point is to implement a policy that makes the most sense for your employees, and to cultivate an office culture that supports the use of vacation days.

A few creative ideas:

Some companies have implemented creative ways to balance the business demands of getting things done and the employee’s needs for “me time.”

  • At LinkedIn, employees get monthly “Investment Days,” known as InDays, to take a break from their daily routines and focus on themselves, the company, and the world. They can attend company outings, or hang out at the office.
  • At Dupray, a Canadian company that sells steam cleaners and steam irons, employees had complained about constant stress and too many hours in the office. So the company added an extra benefit to their existing paid vacation time: workcations, where employees can work remotely from a place “significantly nicer than the office.” Dupray allows 10 days a year of workcation.“An employee who is waking up to work in front of a beautiful metropolitan skyline or a sandy beach is exceedingly appreciative of the gesture,” says Dupray HR Director Pierre Tremblay, “If you’re able to give your employees a bit more, they will usually pay it back exponentially.”
  • Some companies have gravitated towards a “paid, paid vacation” model. Travelzoo, a firm for travel and entertainment deals, gives employees a $1,500 stipend to go on an actual trip when using their vacation time.

Bottom-line:

The ideal vacation policy will never be a one-size-fits-all model. However, the ideal standard is employee well-being over company profitability. Employees should be able to access their earned vacation time easily, and feel comfortable enough to relax when they do take vacation.