Should Businesses Offer Mandatory Vacation?

The concept of mandatory vacation has become a popular debate in countries renowned for workaholism. Should your business offer this to manage your workforce?

Japan, whose workers take less vacation than those of any other industrialized country, has considered a law mandating that employees take a certain amount of time off each year. That’s because even though employers are required to offer workers three weeks off, a large percentage of the workforce doesn’t use it.

In the United States, which is also notorious for overworked employees, the government is unlikely to establish any requirements, let alone force workers to take paid time off from work. However, in the wake of research showing the workforce advantages of leisure, some companies have taken aggressive moves to get their employees out of the office for a couple weeks a year.

What’s the problem?

The issue is with overworked employees. It’s undeniable that burnt out workers are a drag on the company and negatively impact the bottom line.

While there may be times when a business owner decides that an employee’s exhaustion is simply proof that he or she isn’t right for the job, studies on work habits in different countries show that, in some societies, people are systematically overworked in a way that is not beneficial to business.

Among industrialized countries, the United States has some of the longest workdays. While some would point to America’s prosperity as evidence that the extra work pays off, there is also a strong case that we’d get more done if we stopped working so much. 

Working a lot doesn’t mean working well

There are a number of studies that have found that workers are more productive when they are given more leisure time. Before delving into the benefits of logging off, consider the benefits of more modest breaks from work that research has shown to improve performance.

One of the first such investigations came from the Cornell University Ergonomics Laboratory, which in 1999 conducted a study in which some employees of New Century Global, an insurance company, received regular notifications throughout the day reminding them to take a break or to maintain a healthy posture while working. The study found that those who got the notifications produced work that was 13 percent more accurate than others, suggesting that short breaks helps refresh people, leading them to work better. 

Similarly, research has shown that allowing workers to periodically sate their internet appetite throughout the workday leads them to be more productive overall. A study by the National University of Singapore found that employees who spend less than 20 percent of their workday on non-work related internet activity are nine percent more productive than employees who avoid internet distractions entirely.

So, if there are psychological benefits to taking short breaks from work, is there an even greater benefit from a one or two-week break? Many experts believe so. A study of business executives from around the world found that those who take more paid time off are more likely to work at a face pace and “feel impatient” about getting work done when they’re on the job. While the authors of the study did suggest that those with the most time away might experience stress from work accumulating while they're out of the office, they also argued that this can lead employees to be more efficient and less distracted during work hours. 

Laptop Work-3.jpg

The qualities of a top performer

The classic thinking of an ambitious employee is that working late, responding to emails at all hours of the day and never taking a sick day is one of the best ways to get in the boss’ good graces. A two-week break? Out of the question! Won’t that just show that the company can function without you? 

In fact, a study found that employees who use all of their vacation are 6.5 percent more likely to be promoted or get a raise than those who forgo 11 or more days of paid time off. That means that the people who are essentially working for free for two weeks or more a year don’t appear to getting much return on their substantial investment of time and unpaid labor. 

Research has shown that another advantage to taking a much-deserved break is that it usually makes people happier. And happier employees are not only more productive, but also much easier to work with. A survey of managers found that more people believed that the greatest benefit to holidays was a happier workforce than those who believed the chief advantage to be increased productivity.

Generous policies often don’t work

Simply offering employees ample holidays does not necessarily lead to workers using them. For instance, a number of prominent companies have experimented with “unlimited” policies, in which workers were encouraged to ditch their job for as much time as they felt appropriate.

Global crowdfunding company Kickstarter implemented such a policy but then changed back after it found that employees were actually taking less time out of the office than before. Why? It might be because when there is a standard allotment, an employee doesn’t feel guilty about using it. But when things are more open-ended, a worker is left constantly wondering if they’re taking more time than their colleagues. 

So...should vacation be mandatory?

If a business believes that rest and relaxation improves performance, then it would stand to reason that it would require employees to take vacations.

Establishing compulsory time away from the office is hardly a new concept in the financial sector, where many institutions have historically required employees to take a certain amount of consecutive days off as a way of preventing fraud. More recently, though, some employers have begun to put big pressure on workers to take a break simply because they believe it will benefit the company in terms of productivity, engagement and employee satisfaction.

Marketing and sales software company HubSpot showed one way to do it, when it required that its employees (who already have unlimited time off) take at least an annual two-week break. To minimize stress, the company also allows its sales team to lower their monthly sales quota twice a year. 

Another way to get employees out of the office may be to strongly incentivize breaks. For instance, after seeing his employees struggle with the concept of unlimited vacation, Evernote CEO Phil Libin offered employees $1,000 to take at least one week off. Those who didn't do this left money on the table. 

There is no one-size-fits-all solution

As is the case with most workplace policies, what works for one company may not work for another. For instance, while some are staunch believers that employees need to log off for stretches of time, some workers are less inclined to be away from the office for a while. They might instead prefer taking a long weekend every now and then to take a little trip outside of town or relax for a few days to catch up on some much-needed sleep

But whether or not you make vacation mandatory, the key is shifting employees’ mentality about it – from one of guilty pleasure to that of a well-deserved break. To manage your workforce effectively, keeping track of hours with a time sheet app can help identify who needs a getaway, and why it would be a good idea for the employee to use it.

For more insights on how the world works, check out our blog posts about work hours and labor laws.

Regulatory ComplianceEmployee Management

Recent Posts