Q: I work at a midsize company and I have noticed that there is this unspoken rule not to take all your vacation days. This is a good workplace, but how do we (employees) make the case of how important this time off is to management?

A: Around this time of year questions about vacations loom large. Taking a break from work is a real priority – in fact, some employees value this time off more than money. Recently, Xerox Corp. offered employees the opportunity to “buy” an extra week’s vacation by having a week’s pay be deducted over the course of the year, a trade-off that would trim their checks by about 2 percent. Seven percent of Xerox’s 29,000 U.S. employees chose time over money.

However, as we often hear in the news, the U.S. does not fare well in this arena in comparison to other countries. Ours is the only advanced economy in the world that does not oblige employers to offer paid time off to employees. One out of four employees in the private sector do not have any paid time off, according to a new study by the Center for Economic and Policy Research; that adds up to about 28 million Americans.

In addition, many of us that do have vacation time do not use it all. A recent survey by employment firm Hudson reports that more than 50 percent of Americans fail to use all their vacation days. And last month BusinessWeek reported that “Americans take even less vacation than the Japanese, the people who gave rise to karoshi – the phenomenon of being worked to death.”

The most frequently cited reasons for why Americans do not use all their vacation days include job pressures and having too much work to do. In addition, we shouldn’t forget the subtle (and not-so-subtle) discouragement of employees by some managers to not use all their vacation days, as it disrupts the workflow. New employees are especially susceptible, as they fear that if they do use all their vacation time, they will be viewed as less committed.

Compounding the problem, many higher level managers have convinced themselves that they couldn’t possibly take all their vacation days because no one else could do their job and that things will fall apart if they are gone.

What costs are associated with this obsession with work? A 2001 study by the Families and Work Institute found that employees that did not take all their vacation time reported feeling overworked with much higher stress levels than those that did use all their vacation time. The more overworked, the more likely these employees were to:

  • Make mistakes on the job
  • Feel anger toward employers for expecting too much
  • Resent coworkers who are not viewed as working as hard as they do
  • Start looking for a new job
  • Express lower morale and less engagement in their jobs
  • Take more unscheduled absences, often faking sick days

The trend of employees faking sick days is particularly costly – as reported in a recent study by HR and employment law information and services provider CCH, unscheduled absenteeism translates into direct payroll costs of up to $850,000 for large employers.

Consequently, today you’ll find leaders from successful companies taking these issues very seriously and helping employees balance their work and family life by:

  • Insisting that supervisors, managers and top-level executives take all of their vacation time to set an example for everyone else.
  • Pushing managers to delegate and train their staff on critical duties so they do not feel required to stay in contact with the company 365 days a year.
  • Developing effective cross-training throughout the company, making employees  more flexible and familiar with all aspects of the work so they can “pinch hit” for one another. This also leads to greater staff capacity and improved employee communications.
  • Combining vacation, sick and personal days into a central bank and allowing employees more control over their paid time off.

More control over their time off is exactly what the employees of Maine-based GreenPages, a national IT solutions provider, get. As we reported in our Success Story of the company, the firm awards everything from “Sanity Days” (an extra three days off per employee per quarter for themselves, family needs, or anything else) to four-week sabbaticals with pay for employees who have been with the company for five or more years.

The GreenPages example shows that organizations’ leadership are only limited by their imagination in how they approach time off for their workforces. It also shows that the ROI for the design and implementation of an appropriate time-off framework is a reduction in hiring and training costs. In the case of GreenPages, their recruitment manager tells us their programs along these lines have kept employees engaged and given them the feeling of being appreciated – priceless qualities for a small business.