Most bosses actively or implicitly discourage workers from taking vacation, study shows

ByJames Dennin

Virtually all managers — 9 in 10 — claim they encourage their employees to take paid time off, according to a recent study. 

But then why do Americans leave hundreds of millions of vacation days unused?

That same study suggests mixed signals are to blame: While the majority of bosses say they nudge workers to take days owed to them, 68% of workers themselves report hearing "nothing, negative or mixed messages about taking vacation," according to the new report by travel industry trade group Project Time Off.

In fact, managers actually "pass on vacation in greater numbers than non-managers," Project Time Off senior director Katie Denis said in a phone interview — and that behavior can rub off on employees: "'Do as I say not as I do' is a very powerful message," Denis noted. "You leave people not knowing what to do."

Anxiety plays a role as well. Many employees don't take time off, Denis said, because they're afraid of being seen as replaceable.

Jacques Brinon/AP

The consequence of these pressures is more than just stress and health problems: Unused vacation time actually cost employers $272 billion in the last year, a 21% increase since 2015.  

Publicly traded companies are required to report unused vacation days as liabilities to the Securities and Exchange Commission, since it's still considered money owed to the employees, Denis said. Workers are due that money at some point, whether it's upon retirement or when they change jobs. 

In fact, companies don't lose much productivity from providing vacation — and businesses might even be better off when workers take time off and end up happier and better-rested.

"We see the productivity net out at about even," Denis said, pointing out that when people go on vacation, they usually work a little harder in the days immediately beforehand and afterward to make up for it. "Energy productivity, engagement, happiness — these affect your bottom line in ways that are difficult to measure."

There are other costs to the U.S. economy because of workers skipping paid time off.

A previous Project Time Off study found that if everyone took their vacation, Americans would generate an extra $223 billion in economic activity — and net an extra 1.6 million new jobs

Luckily, some companies have already identified promising strategies to get workers to take the time owed to them.

Netflix's unlimited vacation policy, for example, works well because the company's CEO Reed Hastings is vocal about vacation's benefits, Denis said, and he himself takes six weeks every year.

And when the U.S. Travel Association, the parent company for Project Time Off, began offering a $500 stipend to every employee who used all their vacation up, the percentage of employees who used all their time skyrocketed from 19% to 91% in just one year.