Unused Time Off Harms U.S. Productivity, Broader Economy

WASHINGTON—More than forty percent of American workers who receive the benefit of paid time off finished the year by squandering a portion of their allotted time, according to a new study by Oxford Economics conducted for the Project: Time Off, “An Assessment of Paid Time Off in the U.S.”

Despite an intrinsic understanding that using the leave they’ve earned delivers considerable personal and professional benefits, Americans left an average of 3.2 vacation days on the table in 2013, totaling 429 million unused days among U.S. workers.

According to the study, most managers recognize the benefits of taking leave, namely higher productivity, stronger workplace morale and greater employee retention, as well as significant health benefits. Yet, what managers believe and what employees perceive can be two different things.

Nearly 34 percent of employees indicated that their employer neither encourages nor discourages leave, and 17 percent of managers consider employees who take all of their leave to be less dedicated. Four in ten American workers said their employer supported time off, but their heavy workload kept them from using their earned days.

“Despite the myriad benefits of taking time off, American workers succumb to various pressures—some self-imposed and some from management—to not take the time off to which they are entitled” said Adam Sacks, President of the Tourism Economics division of Oxford Economics. “Leaving earned days on the table harms, not helps, employers by creating a less productive and less loyal employee.

“Further, it is a misconception that employers are ahead of the game when workers don’t use the time they’ve earned. In fact, stockpiled time off creates considerable financial liability for companies and governments when employees ‘cash out’ upon departure.”

The study was based on a survey of 971 employees, 700 of whom receive time off as part of their benefits package, conducted between September and October 2013.

Other key findings:

  • Millions of Jobs: If workers used all of their available time off, the economy would benefit from more than $160 billion in total business sales and $21 billion in tax revenues, spending that would support 1.2 million jobs in industries ranging from retail to manufacturing to transportation.
  • Even Small Changes Lead to Big Gains: If employees would take just one additional day of earned leave each year, the economy would benefit to the tune of $73 billion dollars in total impact.

“Underutilized time off is a monstrous missed opportunity, not only for American workers and their families, but also for employers and the broader economy,” said Roger Dow, president and CEO of the U.S. Travel Association. “Americans take great pride in their work ethic, and our country’s prosperity is a testament to that. We decided to explore why Americans understand the value of time off, continue to need it, yet squander so much of it. We seem to be wired to put the pedal to the metal, but there are also undeniable benefits to tapping the brakes.

“Leaving just one day less on the table—whether to tackle a project at home or simply enjoy a long weekend—would mean $73 billion in output for the U.S. economy and lead to significant positive impacts for employees and businesses.”

###

Methodology

The primary research for “An Assessment of Paid Time Off in the US” was based on an online survey fielded from Sept. 17 to Oct. 5, 2013. The sample included 971 employees, 700 of whom receive paid time off as part of their benefits package. The impact of spending was determined through use of IMPLAN economic impact model for the U.S. to calculate jobs and tax impacts.

About Project: Time Off

Project: Time Off is an initiative to prove the personal, business, social, and economic benefits that taking earned time off can deliver. We aim to shift culture so that using personal time off is not considered frivolous, but essential to strengthening families and improving personal health; a business investment with proven returns and an economic necessity. Learn more at ProjectTimeOff.com.

About Oxford Economics

Oxford Economics is one of the world’s leading providers of economic analysis, forecasts and consulting advice. Founded in 1981 as a joint venture with Oxford University’s business college, Oxford Economics has become one of the world’s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact.

Note: Project: Time Off recently released new research that updates some of the facts and figures in this resource. See how they’ve changed in our new report, The High Price of Silence.