Why Business Leaders Should Make Vacation Time Mandatory

On average, Americans work more than people nearly anywhere in the world. This finding holds true across industries, positions, and levels. But it turns out that we’re not necessarily working longer hours. It all boils down to vacation time.

One 2016 study prepared for the Institute for Labor Studies found that on average Europeans worked 19% fewer hours than their U.S. colleagues. The same study found that Europe's higher number of vacation days largely accounts for the difference. So, how much more vacation time are our European counterparts enjoying?

The United States, which doesn't mandate statutory paid leave days, is an outlier in the developed world. A study by the Center for Economic and Policy Research found that in France, employers must offer 30 paid leave days and cover one paid holiday. In Spain, the minimum is 25 paid leave days and 14 paid public holidays. Also, when American employers do offer paid leave, it tends to be for less time and not fully utilized by employees. A 2018 study by the U.S. Travel Association found that U.S. workers accumulated 705 million unused vacation days in 2017. This represented a 662 million day increase over the previous year.

On the surface, the American work ethic may appear to be great for business. Unfortunately, the numbers don’t support this assumption. There is a growing body of evidence suggesting that not granting or taking vacation time is damaging to employees and organizations. It may even be making U.S. organizations less productive and competitive in a global market. If that’s not reason enough to start taking vacation time seriously, here are four more reasons with metrics to consider.

Reason 1: Vacation Time Increases Creativity, Productivity, and Engagement

If you’re like most leaders, you’re likely wondering how much mandatory paid vacation time will cost your organization. As it turns out, it may not cost anything and even yield a significant return.

In 2017, Neil Pasricha and Shashank Nigam, the CEO of SimpliFlying, collaborated on an experiment. The company decided to force its employees to go on vacation. In fact, if they even contacted the office while on vacation via email, WhatsApp, Slack, or any other platform, they would not get paid for their vacation time. After the trial, they asked managers to rate employee productivity, creativity, and happiness before and after the forced vacation experiment. What they discovered was encouraging. As reported in the Harvard Business Review, creativity surged 33%, happiness went up 25%, and productivity increased by 13%.

In many respects, Pasricha and Nigam's findings are entirely consistent with the principles underpinning psychologist Mihály Csíkszentmihályi’s concept of flow. One of the basic principles of flow is that to reach peak performance, you also need to take time out to rest and fully recover.

Reason 2: Vacation Time Positively Impacts Mental Health

Research overwhelmingly suggests that vacation time positively impacts mental health.

One 2018 study based on a longitudinal sample of 3380 working men and women ages 45-52, for example, found that for every ten additional paid days of vacation, women’s depression dropped 29% on average. The results were most notable for women with children. This group saw a 38% decrease in depression for every 10 additional days of paid vacation time.

Another study published in 2018, based on a smaller sample of 40 male and female managers, found similar results. In this case, just “one single short-term vacation, independent of the mode” was found to have “large, positive and immediate effects on perceived stress, recovery, strain, and well-being.” The study further found that positive impacts can be detected 30 to 45 days post-vacation.

Reason 3: Vacation Time Positively Impacts Physical Health

Regular vacations have been found to increase general health during midlife and improve one's health in old age.

Source: Photo by Danielle MacInnes on Unsplash

Beyond the mental health benefits, there is also a growing body of research suggesting vacations are good for our physical health. For example, depending on what you do (e.g., go on a hiking tour versus golf vacation), your vacation may lead to weight reduction and cardiovascular benefits. Research also indicates that there are dire consequences for choosing to not take a vacation or take only a short vacation.

One 2017 Norwegian longitudinal study of 2741 male subject found that shorter vacation times were associated with a higher BMI, higher levels of coffee consumption, and a lower self-perception of one’s health. Worse yet, shorter annual vacation times were associated with higher mortality levels. The study also found that taking shorter vacations during midlife leads to worse general health in old age.

On a related note, there is also evidence that in some professions (e.g., taxi driving), regular vacations can reduce the risk of on-the-job accidents.

Reason 4: Vacation Time Reduces Burn-out and Increases Job Satisfaction

The World Health Organization (WHO) recently upgraded burn-out in the International Classification of Diseases (ICD-11). It is still not classified as a medical condition, but it is now recognized as an “occupational phenomenon.” The WHO explains: “Burn-out is a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed." The WHO associates burn-out with three dimensions: feelings of energy depletion or exhaustion; increased mental distance from one’s job, or feelings of negativity or cynicism related to one's job; and reduced professional efficacy. As it turns out, vacations also seem to play a major part in whether one experiences workplace burn-out.

One 2019 study that surveyed 1115 medical oncologists found that decreased vacation days were a factor driving high burn-out rates and low job satisfaction. Another recent study, also focusing on physicians, reached a similar conclusion. “Taking vacation time is critical," the researchers found. Among other things, "Vacations result in a recharged individual who is more productive at work upon return.” But the authors caution, “During the vacation, it is important to disconnect from work. That means not answering work e-mail . . . not taking telephone calls from patients, and not perusing office schedules and patient records.”

And this brings me to my final point. If you want your team to reap the full rewards of going on vacation, encourage them to take vacations that will enable them to truly unplug and relax. The benefits of vacations are diminished when we try to do too much in too little time. In other words, touring eight countries in seven days may be possible, but it's unlikely to yield the best mental and physical health returns.