The Shrinking American Vacation

A heavy workload and pressures from peers and supervisors may keep many employees at their desks in U.S. companies.

They are working more overtime and taking less vacation time.

A survey by Management Recruiters International of 730 U.S. executives in 2003 found that 47 percent surveyed wouldn't use all their vacation time, and 58 percent said that the reason was job pressures. This same study also found that 35 percent said that they had too much work to take a vacation and that 17 percent felt that their boss was not supportive of employees taking all of their vacation days.

In another study by Expedia.com in 2003 they estimated that there was $21 billion in unused vacation time for that year. After repeating this study in 2004 they found that 35 percent of employees didn't take all their time off because of job pressures. This reflects the findings in the above-mentioned survey by Management Recruiters International.

Some have estimated that vacation time has shrunk from an average of more than 7 days (25 years ago) to only 4 days (last year).

The average employed American sacrificed three days of vacation this year according to the survey. That is up 50 percent from the two days they gave up in 2003.

Thirty percent of employed adults give up vacation time they have earned, resulting in a total of 415 million unused vacation days in 2004, according to a survey by Harris Interactive.

Clearly, Americans are taking less vacation time each year. The reasons are numerous and complex, but the negative results of this trend are becoming clearer.

Comparisons To Other Countries

The United States is one of the only modern countries without vacation-time minimums mandated by law.

In many European countries workers get five weeks of vacation. Laws mandate a minimum of two weeks vacation in Canada and Japan.

Employees in European Union countries get four weeks of paid vacation by law, while many employees in the U.S. would need to work at a job more than a year before getting the conventional two weeks vacation, and the law does not mandate that.

For example, the London-based HSBC Group starts its England based employees out with 26 vacation days plus 8 public holidays each year. A U.S. employee in an American subsidiary would have to be on the job for 10 years at HSBC before getting that kind of time off.

Absenteeism And Overtime Is One Result

Shortened vacations and unused vacation time can backfire and have unintended consequences.

If employees don't get enough vacation time, stress and circumstances build and can result in unscheduled absences or absenteeism. This can be because last-minute vacation requests and sick calls can come when an employee "cracks", or gets into "crisis" situations, or just needs time off to deal with life occurrences.

An employee doesn't take a vacation, or they take a shortened one, followed by working overtime and under pressure for months on end. Eventually they call in "sick" or take days off unscheduled. The remaining employees work overtime, cut short their vacations, or work under greater pressure as a result.

This is how the cycle continues.

A study by Circadian Technologies found that the average overtime rate in extended-hours businesses in 2004 was 16.2 percent - that is almost one extra day of work each week.

This is an increase over the 12.6 percent rate in 2003.

Along with the increase in overtime came an increase in the absenteeism rate, up from 5.8 percent in 2003 to 12.4 percent in 2004. Of course this compounds the problem because when people don't show up for work other people are asked to do overtime to pick up the slack.

In general companies with high amounts of overtime had absenteeism rates of 17 percent, versus 9 percent in companies with low amounts of overtime.

(See our article on absenteeism - "Absenteeism And The Bottom Line")

So one element of the shrinking American vacation is the increase in overtime, which often leads to an increase in absenteeism and further pressures put on the remaining workforce.

Less vacation, more absenteeism, more overtime. It seems to be a vicious cycle.

Summary: Flexible Time Off Programs

One method that an increasing number of companies are using to combat this situation is the use of flexible time-off policies.

These policies lump personal, sick and vacation days into one pool of time off, instead of a more traditional vacation and sick leave package.

Sixty-three percent of U.S. companies now use some form of flexible paid-leave bank, compared with 21 percent in 2000, according to the CCH Inc. 2004 Unscheduled Absence Survey.

Often companies find that with these policies in place there is a reduction in unscheduled absences. The sort of flexibility that these programs offer enables employees to balance their work and personal lives, and this is becoming more of a priority with American workers each year.

The shrinking American vacation rebounds with consequences that are mostly negative.

It seems that this trend may reverse over time, as the results of drops in vacation time used prove more costly than providing alternative solutions to deal with the problem of stressed and stretched employees. One such piece of this solution is the increasing availability of flexible time-off programs.

For more information about how to maximize performance in your company by providing the appropriate balance of time-off and vacation time within the scope of your productivity goals, please contact us at Braun Consulting Group.