Current research shows that employees worldwide are more stressed, worried, angry, and sad than before the COVID-19 pandemic. 57% of employees in the United States and Canada report high-stress levels. These increased levels of stress, worry, and other negative emotions are primary indicators of future employee burnout (Gallup, 2021). To battle these negative emotions and potential burnouts, many companies are instituting mandatory vacations for their employees. How does mandating vacation improve employee wellbeing and how does it support the organization as a whole? Continue reading to find out.
Current trends
In recent years, employees worldwide have been affected by global pandemics, economic crises, racial and political tensions, and mental health crises. The pandemic has caused a ripple effect across employees and business leaders of every industry and in every location.
Workforce mental health
Currently, only 20% of employees worldwide feel engaged, involved, and enthusiastic about their careers, only 32% of employees feel that they are thriving in their lives, and a little over 40% of employees worldwide report experiencing worry and stress “during a lot of the previous day.” Since 2009, worry, stress, anger, and sadness have been increasing in the global workforce. There was a sharp increase in many of these negative traits during the COVID-19 pandemic (Gallup, 2021).
“Almost everything will work again if you unplug it for a few minutes, including you.” - Anne Lamott
Employee burnout
The negative emotions and traits that have developed in light of the COVID-19 pandemic encourage the development of employee burnout. The Mayo Clinic defines burnout as “a special type of work-related stress.” Burnout is a “state of physical or emotional exhaustion” (Mayo Clinic, 2021). Other sources state that burnout is when an employee has “exhausted their physical or emotional strength” (Lab Manager,2009).
Burnout can be costly for companies; increasing expenditures on healthcare, reducing employee productivity, and increasing the likelihood of employee resignation (Lab Manager, 2009). Harvard Business School estimates that workplace stress and burnout are responsible for up to 8% of national spending on health care and contribute to 120,000 deaths per year (Blanding, 2015). Studies have shown that employees who are suffering from burnout are 63% more likely to take a sick day and 2.6 times more likely to look for other employment options (Wigert & Agrawal, 2018). Replacing these burnt out employees can cost on average 6 to 9 months of their salary (Merhar, 2020). For example, if a manager who makes $60,000 a year resigns, it can cost $30,000 to $45,000 in training and recruiting expenses to replace that one employee.
“The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday’s logic.” - Peter Drucker
Corporations that have mandated vacations
In response to these increasingly negative statistics and the potential cost of replacing employees suffering from burnout, many corporations are instituting mandated vacations for their employees. The following corporations are some of the many that started mandating vacation.
NAMI - The National Alliance for Mental Illness
From August 1st through 8th of 2021, the National Alliance for Mental Illness established a corporate-wide “Mental Health Rest Up Week.” During this paid mental health week, all offices except an emergency mental health helpline, were closed for employees to focus on their mental health and wellbeing. In their press release, they stated that they are doing this to provide “a mental health break from what has been a tumultuous year and a half of virtual work caused by the COVID-19 pandemic.” CEO Daniel Gillison further explains this decision in his statement, “We have to be advocates for our own employees and give them an opportunity for self-care. Like many Americans, NAMI employees have been working tirelessly in changing conditions since the pandemic began, and we feel it is necessary to hit the pause button and give our employees a chance to rest. Our people are our greatest asset.” They hope that this mandated vacation will encourage other corporations to prioritize their employees’ mental health and wellbeing.
LinkedIn employees worldwide were mandated a paid week off starting April 5th, 2021 (Vasel, 2021). Part of LinkedIn’s management procedure is quarterly employee surveys. In 2021, surveys started to reveal some of the weight that employees were carrying in light of the pandemic. Many employees reported feelings of burnout, “lack of self-care”, family struggles, and feelings of loneliness and isolation. Many employees were having difficulty unplugging from the workload that is now done at home remotely. In response to this LinkedIn started a program called “LiftUp” to “address burnout, work-family balance, [and] people feeling lonely and isolated.” They instituted several programs for employees and managers including highly favored “no-meeting days.” Part of this “LiftUp” program was also an additional mandated week off of work.
Previously, LinkedIn had a December shutdown which reportedly re-energized employees and inspired their new weeklong shutdown. In an interview with ABC news, Teuila Hanson, LinkedIn’s Chief People Officer, shares that LinkedIn wanted to address burnout and self-care while also showing gratitude to their employees. Hanson states that “we wanted to make sure we could give them something really valuable, and what we think is most valuable right now is time for all of us to collectively walk away. And what is really nice after a shutdown, you come back and you don't have a barrage of emails or meeting notes that you feel like you have catch up on or you feel like you have to peek at your email. You want the goodness of your vacation to last a little bit when you come back” (Vasel, 2021).
“When we are no longer able to change a situation. We are challenged to change ourselves.” - Victor Frankl
Hootsuite
Hootsuite is a social media management platform that has also instituted a week-long company shutdown called a “Wellness Week.” In a press release from Hootsuite, they stated that “the pandemic reminded us how important mental health is. So we’re making big moves to support our people—including a company-wide week off.” They sight the many effects that COVID-19 has had on millions of people as well as the effects of racial and political tension as part of their reasoning for instituting a week-long shutdown. Hootsuite also acknowledges that the transition to working from home has led some employees to work more because of a lack of separation from home and work.
They summarize their responsibility to their employees in the following impactful statement: “Traditionally, the workplace has been a place where people have been asked to check their personal lives at the door, but as organizations consider thoughtful new approaches to where people will work (with hybrid models seeming like the most coveted options these days), we’re also recognizing an increased responsibility towards the health of our people—and that means encouraging them to bring their whole selves to work.” Hootsuite is embracing the mental health needs of their employees with a mandated week off of work and additional mental health programs which will ultimately benefit production levels, turnover rates, and employee wellbeing (Jensen, 2021).
Lessonly
Lessonly is a workplace training platform that is now not only implementing unlimited paid time off programs, but also company-wide winter breaks, and a mandatory vacation week in July (Place, 2021). Megan Jarvis, Vice President of Talent at Lessonly, explains that they are implementing these programs to “not only [respond] to what’s happened over the last year” but because they want to ensure that they are “continuing to support that whole person as part of [their] team.” (Place, 2021). In an interview with Employee Benefit News, she explains that one of the primary reasons for this increased mandate on vacations is to encourage employees to rejuvenate and unplug. Another reason is because of the variations in job experiences amongst team members. Jarvis states that “if we leave it to each individual to decide what to do when my company tells me to take time off and we don’t set an example, we have people who have different definitions based on their experiences. So set some times to make sure individuals are taking the time because they might not have the trust to do it based on their experiences.” (Place, 2021).
Benefits of mandated vacations
There are many benefits to the newly mandated vacations. Many of these benefits have a cascading positive effect on productivity and employee retainment for corporations.
“Vacations mean a change of pace, a gentleness with ourselves, a time or rest and renewal…” - Anne Schaef
Mental health benefits
Dr. Andrea Robinson and the American Psychological Association identifies several mental health benefits. Research shows that those who take more paid vacations have higher rates of life satisfaction. Paid vacations “promote improved work-life balance, decreased time pressure, and better mental health”. Furthermore, vacations also help employees live healthier lives and have a reduced risk of heart attacks. Research also shows that vacations can improve overall mental health by reducing depression and anxiety. Vacations can improve mood, reduce stress, and reduce levels of the “stress hormone” called Cortisol (Robinson, 2017).
Productivity increases
Research also indicates that vacations can improve employee productivity levels. After taking a vacation, productivity levels show significant levels of improvement. Employees also report that their tasks are “less effortful after vacation compared to before vacation” (Robinson, 2017). While vacations improve productivity, they also make employees’ productivity levels more resilient to stress and change. Sabine Sonnentag, a professor of Organizational Psychology at the University of Mannheim in Germany found that those who disengage from work when not at work, are more resilient through stress at work. Vacation refreshes employees, making them more productive and resilient in the workplace (Seppala, 2017).
Organizational benefits
“Integrity is the most valuable and respected quality of leadership.” - Brain Tracy
Organizational resiliency
Mandatory vacations can also address how resilient corporations are to staff shortages and changes. While each employee serves a unique purpose in a corporate community, it is important to understand how to navigate in that employee’s absence. Can an organization continue to be productive in the absence of a key employee? If so, how will that employee’s responsibilities be dispersed among other employees? Having a strategic plan for employee vacation can help business leaders readjust roles and responsibilities in response to an employee’s resignation or retirement.
Fraud detection
An often unintended benefit of mandating vacations is fraud prevention. You can see how your company operates when key individuals and utility players are away from work. Do you have policies and procedures in place to document all best practices? Having mandated vacations can also benefit the organizational structure of a corporation as well.
Many individuals that engage in fraud against their company do not take their annual leave in fear of their fraudulent activity being caught. Jonathan Middup, a partner at Ernst & Young’s Fraud Investigation and Dispute Services practice stated in a 2018 interview that “the profile of a typical fraudster is a long-serving, trusted employee, who works long hours and is reluctant to take their annual leave.” Furthermore, Ernst & Young have also reported that “their fraud investigation caseloads reach their highest levels during the summer” a popular vacation time (Gage, 2018).
Mandated vacations have the potential to reveal what employees are participating in fraudulent activities and which employees are not. According to Andrew Gage CEO of GL Analytics, more companies are now monitoring vacation habits as part of their fraud awareness strategies (2018). Having mandatory vacation policies gives employers a chance to observe the business in an employee’s absence, which can ultimately reveal fraudulent activity (Gage, 2018). Consider the following example from the Association of Certified Fraud Examiners:
“Steve was a loyal customer of his local bank, City Credit Union, for 30 years. He held basic accounts and mutual fund-driven investment vehicles. However, his ties to the bank went deeper than just business….Chuck, was the branch manager at City Credit Union…. Steve remained friends with Chuck. Steve would visit the bank on the same day and time every month to check on his mutual fund account. He never withdrew from it, but reviewed the interest earned. Chuck was all too happy to greet him every time with a printed statement of his account. This monthly meeting between the two men went on for eight years until the day Chuck was on vacation and a different bank employee gave Steve his account statement. The statement showed that the account was empty. Chuck had slowly drained Steve’s account and had been supplying him with falsified statements each month. City Credit Union had controls in place to prevent a fraud like this. ...Unfortunately for City Credit Union and Steve, Chuck was able to circumvent both of those controls...Once Steve discovered his account was empty, Chuck was fired from the bank and criminal charges were filed. City Credit Union reimbursed Steve for the full amount lost — approximately $130,000.” -Tomasita Pazos, CFE at Association of Certified Fraud Examiners
Mandating vacations not only helps employees but also allows the organization to detect fraudulent activity among employees. When employees are on mandated vacation, they are unable to monitor their own fraudulent activity and keep it from being noticed by employers. This can cause frauds, like in the story above, to be brought to light.
“Resilience is all about being able to overcome the unexpected… The goal of resilience is to thrive…” - Jamais Cascio
The main takeaway
Employees across the globe are facing the negative effects brought by the COVID-19 pandemic as well as several other impactful events in the past year. In response to this, employees are experiencing increasing amounts of stress, worry, anxiety, anger, sadness, and loneliness among many other negative reactions. These negative reactions and emotions have the potential to lead to increased employee turnover and resignation due to burnout and stress. To combat this, many employers are mandating vacations to encourage mental health, wellbeing, productivity, reduce fraud, and increase organizational resilience. Vacation offers several benefits for employees and employers. Mandating vacation has the potential to increase employee wellbeing and in turn, improve employee productivity and organizational income.
“There is virtue in work and there is virtue in rest. Use both and overlook neither.” - Alan Cohen
Resources
Blanding, M. (2015, January 26). National Health Costs Could Decrease if Managers Reduce Work Stress. Retrieved from https://hbswk.hbs.edu/item/national-health-costs-could-decrease-if-managers-reduce-work-stress
Gage, A. (2018, August 07). The Dark Reason Why Some Employees Never Take Vacations. Retrieved from https://glanalytics.ca/vacation-fraud/
Gallup. (2021). State of the Global Workplace 2021 Report (pp. 1-191, Rep.).
Gross, J. (2021, August 14). The Limits of Vacation. Retrieved from https://www.nytimes.com/2021/08/14/business/dealbook/vacation-burnout.html
Jensen, S. (2021, May 27). We're Shutting Down the Entire Company for a Full Week-Here's Why. Retrieved from https://blog.hootsuite.com/mental-health-initiatives/
Ju, S. (2020, November 04). Employee burnout: Why it happens and how to prevent it. Retrieved from https://www.springhealth.com/employee-burnout-management-prevention/
Lab Manager. (2009, December 7). What Is Employee Burnout? Retrieved from https://www.labmanager.com/business-management/what-is-employee-burnout-20015
Mayo Clinic. (2021, June 05). Job Burnout: How to Spot it and Take Action. Retrieved from https://www.mayoclinic.org/healthy-lifestyle/adult-health/in-depth/burnout/art-20046642
Merhar, C. (2020, June 02). Employee retention: The real cost of losing an employee. Retrieved from https://www.peoplekeep.com/blog/employee-retention-the-real-cost-of-losing-an-employee
NAMI. (2021, July 07). NAMI's National Office to Take Paid Mental Health Week. Retrieved from https://www.nami.org/Press-Media/Press-Releases/2021/NAMI-s-National-Office-to-Take-Paid-Mental-Health-Week
Place, A. (2021, July 07). This company is making summer vacation mandatory. Retrieved from https://www.benefitnews.com/news/this-company-is-making-summer-vacation-mandatory
Pazos, T. (n.d.). The Vacation Day a banker's fraud scheme is caught when he takes a day off. Retrieved from https://www.acfe.com/report-to-the-nations/behind-the-numbers/vacation-day/
Robinson, A., Dr. (2017, July). Four reasons to take a vacation. Retrieved from https://www.apadivisions.org/division-28/publications/newsletters/psychopharmacology/2017/07/vacation
Seppala, E., Dr. (2017, August 17). Three Science-Based Reasons Vacations Boost Productivity. Retrieved from https://www.psychologytoday.com/us/blog/feeling-it/201708/three-science-based-reasons-vacations-boost-productivity
Vasel, K. (2021, April 03). LinkedIn gives its entire company the week off to prevent burnout. Retrieved from https://abc7news.com/linkedin-giving-a-week-off-vacation-for-employees-burnout-of-time/10475793/
Wigert, B., & Agrawal, S. (2018, July 12). Employee Burnout, Part 1: The 5 Main Causes. Retrieved from https://www.gallup.com/workplace/237059/employee-burnout-part-main-causes.aspx
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