October 12, 2016Report: $272 Billion Tied Up In Accumulated Private Sector Vacation Time
The new report analyzes the contradiction between management's vacation beliefs and behaviors leading to $272 billion in vacation liability.
It is the punch-line to the clichéd, “What’s your biggest weakness?” interview question: “I work too hard. I care too much.” But somewhere along the way, the joke became prophecy.
The inability to take time off has become one of America’s greatest work culture failings, defining hard work quantitatively not qualitatively, epitomized by the 658 million vacation days workers left unused last year.
Americans consistently assert their vacation time is important, yet the majority leave days unused each year. Who is to blame? The strongest influencer over taking time off is not workers themselves: it is their bosses. The High Price of Silence analyzes management’s viewpoints, pressures, and privileges regarding time off.
We must better understand how to create meaningful solutions that work for individual employees and companies. The vibrancy and success of the American business community depends on it.
GfK conducted an online survey using the GfK KnowledgePanel® from January 20-February 16, 2016 with 5,641 American workers, age 18+, who work more than 35 hours a week and receive paid time off from their employer. GfK’s KnowledgePanel® is the only large-scale online panel based on a representative random sample of the U.S. population. This report looks at a subset of this data, including 1,184 respondents who have managerial responsibilities and 312 managers who are executive and senior leaders.
Throughout the report, the data will be referenced according to the following definitions:
Oxford Economics completed a review of Form 10-K financial statements filed with the Securities and Exchange Commission (SEC) by 115 public companies employing 457,000 private sector workers. The financial statements reported the total cash value of accrued paid vacation time and the number of employees for each firm. These data were used to estimate a per-employee liability for the sample of public companies. Oxford Economics used the GfK survey to extrapolate the 10-K analysis to the broader private sector economy.
Managers’ perspective on vacation time is a study in contradictions. While managers are incredibly supportive of taking vacation, they are out of touch with employee attitudes concerning time off and how loudly their actions communicate a much different message to workers.
Perhaps that is why more than two-thirds (68%) of non-managers say they hear nothing, negative, or mixed messages about taking vacation—reinforcing the disconnect between management and front-line employees. Ironically, a majority (58%) of managers also say they hear nothing, negative, or mixed messages about taking vacation, despite the overwhelming number of managers who feel they encourage time off.
Executives and senior leaders further exacerbate the divide between perception and reality. They feel much greater support for taking their time off (55%, compared to 39% of non-managers). That leaves more than sixin- ten (61%) non-manager employees feeling that management is either ambivalent or disapproves of time off.
Managers’ behavior also sends a clear message and reinforces employees’ belief that vacation is not encouraged. Six-in-ten (59%) managers reported leaving time on the table, compared to slightly more than half (53%) of non-managers. Executive and senior leaders are considerably worse; fully two-thirds (67%) of executive and senior leaders left vacation unused last year.
Managers cite returning to a mountain of work as the greatest challenge to taking vacation, but in significantly greater numbers than non-manager employees (47% and 33%, respectively). A majority (55%) of senior leaders felt the same way. Executive leaders actually fear returning to a mountain of work much less: 26 percent.
Managers feel the pressures of their position. They confirm it is harder to take time off as you climb the company ranks their second-biggest challenge (39%) to taking time off, edging out “no one else can do the work” (37%). Again, there is a divide between the highest levels of leadership on the idea that no one else can do the work. More than half (52%) of senior leaders feel that way, but, somewhat ironically, just 34 percent of executive leaders report the same.
While business leaders may feel that simply providing vacation time as a benefit should suffice, corporate productivity expert and author Maura Thomas believes more is needed. “If you think you are coming off as neutral by not encouraging or discouraging taking vacation, your silence could be interpreted negatively,” Thomas wrote in the Harvard Business Review. “While senior leaders may understand intellectually that paid time off improves their employees’ performance, that can get overshadowed by a stronger (and often subconscious) belief that more work equals more success.”
This silence appears to be interpreted negatively by workers, with two-thirds (65%) of Americans saying they hear nothing, negative, or mixed messages about vacation leading to more than half (55%) who are not using their hard-earned time off.
Vacation is not just a tool for avoiding burnout; promoting time off makes it easier to ask employees to log extra hours at critical moments. A majority (72%) of managers agree that encouraging time off makes their employees more willing to put in the long hours when really needed.
Joseph Folkman and Jack Zenger, co-authors of How to Be Exceptional: Drive Leadership Success by Magnifying Your Strengths, studied vacation’s impact on productivity and found that “having more vacation time seems to help employees better understand the importance of being impatient for results and getting as much done as possible” and “that simply spending less time at your desk forces you to waste less time.”
Fast Company’s Lisa Evans referenced a 2011 Intuit Study that showed 82% of small business owners who took a vacation experienced an increase in job performance upon returning to work. She wrote, “That renewed energy and positivity is contagious and can help the entire team be more productive.”
The vast majority (84%) of managers agree that when employees take time off, they return to work with improved focus and creativity.
“Freed from the daily stresses of my working life, I find that I am more likely to have new insights into old problems and other flashes of inspiration,” Virgin Group founder Richard Branson wrote in an op-ed on taking an inspiration vacation.
Time off has been behind many of America’s most admired companies. The filters that made Instagram so successful were inspired during a walk on the beach that founder Kevin Systrom took with his fiancé while on vacation in Mexico. Dropbox started as a simple idea that founder Drew Houston had while traveling. Lin Manuel Miranda, creator of Hamilton, came up with the idea for the musical on vacation. He told Arianna Huffington it was “no accident that the best idea I’ve ever had in my life—perhaps the best one I’ll ever have in my life—came to me on vacation."
“Vacation is one of the few times, especially if someone has a full-time job, to be able to think deeply about a subject and create something new,” Bryan Mattimore, author of Idea Stormers: How to Lead and Inspire Creative Breakthroughs, told Forbes. “Because many things are new on a vacation, it naturally encourages people to transcend their perceptual thinking ruts…which can be great fodder for new ideas.”
Even Starbucks was defined by a vacation experience. In the early 1980s, Starbucks CEO Howard Schultz was attending a conference in Italy and added some extra time to his trip to take in the culture. On a day trip to Verona, Schultz noticed the craftsmanship and reverence at each coffee shop. “In each shop I visited I began to see the same people and interactions, and it dawned on me that what these coffee bars had created, aside from the romance and theater of coffee, was a morning ritual and a sense of community,” Schultz shared in a company news release. “I left Italy absolutely energized by the culture. I couldn’t wait to sit down with the two remaining founders of Starbucks and tell them, ‘We’ve got to do this.’”
In the wake of one of the steepest economic downturns since the Great Depression, the need to assert one’s indispensability at work is understandable. Accordingly, the feeling that “no one else can do the work” is one of the biggest roadblocks to taking vacation for all employees, not just managers.
But managers must think twice about the message they are sending when they believe no one else can do their work. They may be missing out on opportunities to develop the talent they manage—something that reflects well on them. They should consider it a major trouble spot if, in fact, no one else can step in while an employee is away.
Deloitte Consulting CEO Jim Moffatt had an epiphany after sending an email to his team before a vacation. He recounted the email—and what was wrong with it—in a piece for Forbes, “…I started off talking about all the work we had to do and naming a few priorities. I ended the note saying, ‘I encourage you to unplug a little before Labor Day, if you can.’ Not exactly encouraging people to take a real break. By saying ‘if you can,’ I might as well have said, ‘Don’t try.’”
Shortly thereafter, he received some advice from a trusted colleague and friend: stop worrying and start trusting. He was assured that if he had hired the right people and given them the proper strategic direction, there would be no need to send emails while he was on vacation—and if he hadn’t done that, a few emails was not going to fix what was wrong.
“[Trusting your people is] the only way to give others an opportunity to make decisions and gain confidence in their abilities. If you don’t do that, you can’t be sure whether your talent strategy is working,” Moffatt said of the experience.
“You’ll be amazed at what you can do when you’re unplugged—and what your people have accomplished when you plug back in. I can personally attest, you’ll be a more confident and better leader because of it.”
Several companies are taking an active role in creating policies and opportunities for employees to feel more comfortable taking time off.
To reduce the fear of returning to a mountain of work, Huffington Post introduced an email detox program. Inspired by a similar program at Daimler, employees have the option of using a tool that deletes any incoming work email. Senders receive a reply thanking them for their message that informs them the recipient is on vacation, provides the option of an emergency contact, and suggests the sender reconnect upon their return. Employees return to an inbox that does not take hours to sort through while removing the visible “mountain of work.”
“Adopting an ‘always-on’ lifestyle and ignoring these natural rhythms of work and rest comes at a cost, both for an individual’s well-being and productivity, and for a company’s bottom line,” wrote Huffington Post’s Carolyn Gregoire. “But when we do take the time to unplug, the results can be nothing short of transformative.”
To alleviate the pressure employees feel to check in while on vacation, some companies are designating officewide closures. Adobe shuts down for two, one-week periods: one in the summer and one in December.
Since 2009, TED, the idea-generating nonprofit made famous by its short video talks, closes for two weeks every summer, going so far as to shut down phones, email, and even the office Wi-Fi.
“Our shared vacation time is a little hack that solves the problem of an office full of Type-As with raging FOMO,” Editor Emily McManus writes on TED.com. “We avoid the fear of missing out by making sure that very little is going on.”
“We all return feeling rested and invigorated,” said June Cohen, TED’s executive producer. “What’s good for the team is good for business.”
Vacation has the power to give American companies a competitive advantage, but only if they use it.
Managers from the C-suite down need to shake free of guilt and perception issues and embrace the potential time off holds for themselves and their employees. Ignoring vacation is a choice—a choice to fall behind companies that are maximizing its potential to grow their bottom line.
American work culture is on the verge of a transformation. Smart business leaders will drive that transformation, rather than running to catch up.
Note: Project: Time Off recently released new research that updates some of the facts and figures in this resource. See how they’ve changed in our new report, The State of American Vacation 2017.