Summer is finally here, and like you, many of us in corporate America are eagerly anticipating using some of our precious vacation days. Spending time with family and friends, maybe soaking up the sun at the beach, losing yourself in a few good books, or doing whatever you enjoy to decompress from the workplace stress.
Paid vacation time is important for employees and at times feels like there is never enough. The amount of paid vacation days an employer offers is a critical benefit not only for recruiting new employees and attracting talent, but it is also important for employee retention. For employers, especially small to mid-sized businesses, there is a tradeoff that happens between the amount of paid time off offered to satisfy employees versus the cost to the business. So what is that optimal number of vacation days? REPASS wanted to know as well. Here’s what we found.
In June 2015, REPASS heard from 800 working Americans in our Omnibus poll and found that more than half (54%) of those working surveyed currently receive three or fewer weeks of time off a year. About 30% receive between four to six weeks, and surprisingly 16% receive more than six weeks of vacation a year.
So how much vacation time is enough to optimize employee satisfaction? Two weeks? Three weeks? More? Like many things in life, the law of diminishing returns seems to apply to an employee’s satisfaction with each additional week of vacation provided.
In our survey, we found that the greatest positive change in employee satisfaction with their paid vacation days was going from three weeks to four weeks. Satisfaction with the number of vacation days provided among those receiving four weeks of vacation was 46% (top two box score), which was a jump of 19 percentage points compared to those reporting to have three weeks of vacation (27% top two box score). Receiving a fifth week of vacation time appears to provide little return in an employees’ satisfaction with the benefit. Those receiving five weeks of paid vacation only resulted in an additional five percentage points of satisfaction (51% versus 46%) with the benefit.
The margin of change was consistent on the other end of the spectrum as well. Among those reporting to receive two weeks of paid vacation, only 22% were satisfied (top two box score) with the amount of time offered versus 27% for three weeks. The implication for HR benefit managers is that offering employees a vacation benefit of four weeks of paid time off provides your business a target that can help in attracting top talent and optimize between employee satisfaction and cost.
But wait, there’s a big difference between what you’re provided and what you actually take. Did you take all of the vacation time your employer offered last year? Chances are good that you didn’t.
Roughly, only about 40% of those who received four or fewer weeks of vacation indicated that they actually used all the time off their employer provided. And for those that received over four weeks of time off, that number dropped to about 30%. There are many well-documented benefits to organizations for employees taking time away from the office such as increased productivity, higher workplace morale, employee retention, as well as health benefits. So why are 60-70% of workers not taking full advantage of their time off? That is a question to be answered another day. The question for today is how satisfied are employees with the time they actually take off, regardless of how much they receive?
According to our research, those that actually take at least three weeks or more of vacation time have higher levels of satisfaction with their time off than those taking one to two weeks. A little more than 40% of those actually taking three weeks of vacation were satisfied (top two box score) with the time taken, which was the same for those taking four weeks. Even those actually taking 5 or 6 weeks of vacation time, only a little more than half were satisfied. The biggest difference is when employees take two weeks or less of time. The level of satisfaction reported drops to less than 30% of respondents.
So what does this all mean? For those employers who have been contemplating changing your paid vacation day’s benefit, providing your employees four weeks of vacation time appears to give you the most bang for your buck. Just make sure they actually take at least three weeks of it.