Five Reasons Ignoring the Power of Vacation is a Major Business Mistake

The universally reviled interview question, “What’s your greatest weakness?” is often met with an equally clichéd response: I work too hard, I care too much, and sometimes I can get overinvested in my job. Sound familiar?

It should be funny, but Americans have become the punch-line. And we have reached the point that our hard work is working against us. We define hard work as the number of hours someone puts in, but shouldn’t we define it in qualitative rather than quantitative terms?


It’s time to think differently. Vacation is a powerful tool for the companies that recognize its value to their bottom line. Project: Time Off’s latest report shares case examples of companies that appreciate what time off can achieve, and warns of the dangers of ignoring the power of vacation.

  1. It’s the benefit with benefits. When employees rank their top benefits, vacation is number two, just behind health care plans, but ahead of things like retirement plans, pay raises, and bonuses. With all the energy poured into coming up with new perks—laundry facilities, nap pods, pet-friendly offices—one of the most powerful perks is something that’s already in the company handbook. But it has to be encouraged and talked about to be an effective tool. With two-thirds of employees hearing very little about vacation, most companies are failing to make their vacation benefit work for them. Don’t make the mistake of staying silent about vacation time—it matters to employees.
  2. It can reduce balance sheet liabilities. Think it’s great that employees are skipping vacations? Take a look at what it might be costing your business. The U.S. private sector is carrying a $272 billion vacation liability, amassed over years of employees rolling over unused time off. That’s $2,226 per employee. What’s your company carrying? And more importantly, if it’s a big number, what does it say about your culture?
  3. It can enhance productivity. The vast majority of managers (85%) say that their employees are more productive when they take vacation. Further, they also agree (72%) that giving employees a break makes it easier to ask them to put in long hours when they’re really needed. While productivity can be really difficult to measure, the roadblocks to it are pretty easy to identify. Negative team environments and burnout are absolute barriers, but can be neutralized when employees are given time to refresh and reenergize.
  4. It can be a driver of innovation. When was the last time you got a great idea sitting at your desk? The science is pretty clear on how to stimulate creativity—get up and change your view. It worked for Lin Manuel-Miranda, the creator of smash hit musical Hamilton. He told Arianna Huffington it was “no accident that the best idea I’ve ever had in my life—perhaps the best one I’ll ever have in my life—came to me on vacation.” But even if your industry isn’t creative, vacation can be a force for innovation. In 1983, Howard Schultz added time onto a business trip and discovered the craftsmanship and community around coffee in Italy. It informed his vision for the future of Starbucks—including the addition espresso beverages, which I think we can all agree worked out okay.
  5. It can reinforce your talent strategy. Vacation can be a great opportunity to test your talent strategy and give employees a chance to shine when taking on new responsibilities. As Deloitte CEO Jim Moffatt learned, if you have hired the right people and given them the right direction, trust your talent strategy and feel comfortable stepping away. And if you haven’t, it can’t be fixed with a few emails in the days you are off.


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