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Why Fixing Your Vacation Policy and Other Employee Benefits Improves Engagement

June 23, 2024

vacation policyEmployee benefits and compensation have started to become less important in the changing job marketplace, but they still remain a top reason why employees stay with an organization or leave. Making it easy for employees to use their benefits (like your company’s vacation policy) improves engagement and performance.

One of the things I have never understood (at least until recently) was people who don’t take all their vacation time. It’s part of your compensation, people. Go home and do whatever and collect a check anyway. That seems pretty reasonable to me, and my only complaint when I worked for other people was that I didn’t get to do it as often as I wanted. Vacation, holiday, time off, whatever you call it, is vital for employee health. There are huge benefits to the employer as well. When your people are rested and their personal lives are in balance (or rebalanced, thanks to time off), they perform better. They are engaged more fully, and that’s the point.

Leaving It on the Table

So, if it’s such a win-win for everyone, why did fewer than 1 in 4 Americans take all the vacation time they had coming to them? “The average U.S. worker leaves almost half of his or her vacation days on the table.” Why?

Job insecurity has a lot to do with it. In politics, I learned the term “One day, you are out of your office, and the next, you’re out of office.” If the company gets along fine without you for a week, maybe, it could be made permanent?

The Beauty of Simplicity

employee communications software

But another, more addressable reason is that employee benefits packages are so complex that people don’t know how to take all their days. Rather than over do the vacation, they take less than they are allowed. I have believed for years that if you can’t explain your policies to a 10 year old, the policy is too complex and/or you don’t understand it yourself. The entire relationship between energy and matter is E=MC2. Does the vacation policy in your employee benefits and compensation packet run to four, single-spaced pages? It shouldn’t. So, make it simpler; for instance: “You get 15 days, take them, whenever you want. You must give 2 weeks’ notice in writing for any planned time off longer than 2 days.”

That may mean you have to change your policies. Companies have policies about taking a day off after a 3-day weekend, about sick days versus personal days, about accumulating X days off for every Y days employed. Most of that is about benefiting the company, which is fine. But if the fine print of your vacation policy means your people are at their desks all the time, you, as an employer, are losing out.

“If you’re going to make a change , you don’t want to make it about the company’s goals,” says Katie Denis, senior program director at Project: Time Off. “You want to make it about the individual’s well-being.”

Engagement Is Key

What we are after is increased employee engagement. Engaged employees deliver more and better results than those who are not engaged. Human nature is to care about those who show they care about you. Make your benefits policy about the individual’s well-being, make it transparent enough so they can see that, and you will boost engagement.

Where a lot of companies are now is “we want you to show up and work here, and we’ll pay you, and here’s your benefits manual which you can read in your off-hours, if you can follow the jargon.”

I don’t know about you but a benefits package that says, “we want you to get rich, stay healthy and enjoy outside the workplace” would engage me.

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