According to a study by Project: Time Off, an initiative supported by organizations in tourism, hospitality and related industries, miscommunication by managers led to 658 million unused vacation days in 2015.
Project: Time Off senior director and report author Katie Denis noted that mixed signals by managers led to $272 billion in accumulated vacation time sitting on the balance sheets of U.S. businesses.
"Beyond the red mark on balance sheets, not taking time off hurts employee engagement and productivity, affects talent retention, and expedites burnout—all of which hurt a company's bottom line." – Katie Denis
The study also found that:
- 93 percent of managers believe in the importance of time off, but 59 percent reported leaving vacation time on the table, compared to 53 percent of employees
- 67 percent of senior management (executive and senior leaders) left vacation unused last year
- 55 percent of senior leaders and 33 percent of nonmanagerial workers didn’t use vacation time in fear of returning to mass amounts of work
Denis also suggested that senior leaders (below the C-suite level) who don't take vacation time can negatively influence company culture as they interact with nonmanager employees more directly than C-suite executives do.
SHRM’s Steve Miller offers a solution: PTO Exchange.
PTO Exchange allows companies to pay out cash for unused vacation time, removing those liabilities from their balance sheets. Employees can view the dollar value of their untapped vacation time, which can then be used to for education support, student loan repayment, travel, be deposited into a 401(k) or health savings account, or donated to charitable organizations.