America doesn’t particularly value its vacation time. Most employees are guaranteed a certain amount of paid time off every year, but many feel pressured to take fewer days, or are simply too busy. On average, companies owe workers nearly $2,000 worth of accumulated paid vacation time, according to a study by Oxford Economics (pdf) done for the US Travel Association and highlighted by the Wall Street Journal (paywall).
The average is $1,898 for all businesses, and $2,609 at companies with 500-plus employees. That’s both a financial liability, and a sign of an unhealthy work culture.
A travel industry group has a clear interest in promoting more vacations, but the data seem pretty objective.
Oxford searched public 10-K filings that listed ”accrued vacation” as a liability, which gave them a sample of 114 companies with 377,000 employees, and data on how much vacation time they were owed. They also did a series of two surveys to better extend the analysis to smaller and private companies. The methodology is available here (pdf).
U.S. companies are liable for $224 billion in unused vacation time—a combination of days employees will eventually take off or will have paid for if they go unused—$65.6 billion of that came from last year alone. That doesn’t include sick leave, personal leave, or vacation time that falls under a “use it or lose it” policy, or gets paid out at the end of a year.
Employees forfeit as much as $52.3 billion in benefits each year because they can’t roll it over.
This isn’t as much a money issue as it is a management problem. Employees feel like management’s perception or their performance reviews will suffer if they take more time off. Performance tends to suffer more when people fail to take vacation.
Either by setting a good example, or by explicitly requiring or incentivizing employees to take their full allotment of days, managers should make it clear that there is no implicit bonus for sacrificing vacation days.
Too many people behave as though there is.