If employees can’t use their PTO to walk down a white sandy beach, or pay a visit to Mickey Mouse, they don’t want to use it at all — but it’s costing their employers big time.
Since shelter-in-place orders went into effect, employers have been grappling with high PTO balances as employees let their vacation days expire. Ninety-two percent of employees cancelled, postponed or avoided booking a trip due to the pandemic, according to an
“People are really emotional about not being able to take trips and use their vacation the way they want — it’s causing a sense of disenfranchisement,” says Jackie Reinberg, national practice leader of absence management at Willis Towers Watson, an advisory firm. “It’s really important for their overall well-being to take that time to recharge.”
Even before the pandemic, employees had a tough time spending their hard-earned time off. In 2017, workers only used about half of their available vacation time, according to a Glassdoor study.
During COVID, employees are working longer hours and are struggling with mental health challenges like burnout that are impacting their productivity. These stretched-thin employees are costing employers upwards of $125 billion in lost productivity and healthcare costs, according to a study by Harvard Business School.
In order to combat the toll the pandemic has had on employee mental health and encourage time off, employers are updating their PTO policies and launching new benefits to encourage workers to take “staycations.”
Most employers (53%) plan to update their PTO policies in response to high balances, according to a study by Willis Towers Watson. Nearly a quarter are addressing the surplus by allowing employees to carry over a portion of unused vacation into 2021.
“Many employers are allowing [workers] to carry it over into the first quarter — any later and [the employer] would have problems with their taxes,” Reinberg says.
Despite more chances to use their PTO, only 15% of employees used their time-off for a “staycation,” according to IPX1031. And even with some travel restrictions being lifted, most employees (64%) are uncomfortable with flying during the pandemic.
Providing benefits that encourage employees to explore new hobbies could make them more excited to take time off while stuck at home, says Kathy Barber, vice president of benefits and compensation at Ayco, a Goldman Sachs company. At the start of the pandemic, Barber used her PTO to learn woodworking to decorate her home with restored antiques. Now, she’s encouraging other companies to incorporate remote learning into their benefit lineups.
“I started collecting years ago, but I never had time until now to learn how to do it,” she says. “I get a lot of enjoyment out of it and it’s a great stress reliever.”
Barber and her team help employers design benefit programs; since the pandemic, Ayco has offered digital platforms for coworkers to connect and engage in learning activities. A large employer that Ayco works with designed a program that allows employees to put unused PTO dollars towards their student loans.
“There are websites, like Udemy, that teach online classes about pretty much any hobby for under $10,” Barber says. “Internally, we’ve also had employees teach yoga and cooking classes over Zoom.”
For some, a staycation provides the perfect opportunity to connect with loved ones without the stress of balancing work and home responsibilities. Kim Jones, people experience leader at PwC, says she used her own PTO to spend time with her daughter, who had returned home from college. Although they were quarantined, she says the time they spent together proved invaluable; national calls for diversity in the wake of George Floyd’s death gave Jones and her daughter an opportunity to reflect on their own experiences as Black women.
“We may not have been able to go anywhere, but it was really special to have that time to bond and just talk,” Jones says. “It gave us a chance to connect on a deep, personal level, and to have important conversations about what’s happening in the world, and how it’s going to affect her going forward.”
While employees may feel like they’re wasting precious vacation time staying at home, employers need to encourage time off as a benefit no matter where or how employees choose to spend it, says Rhiannon Staples, CMO at Hibob, an HR software company.
“Employers really need to communicate that it’s ok for employees to just take time for themselves,” Staples says. “It doesn’t matter if you’re staying home reading a book, or working on a hobby — if you’re taking time to do something you enjoy, it’s never a waste.”
Staples says employers need to make an effort to show employees that everyone, especially company leaders, use their vacation time. Her company, Hibob, created an employee communications platform that allows everyone in the company to see when every employee is taking vacation.
“Transparency is key,” she says. “You can’t expect employees to take time off just because you say they should — show them it’s not only ok, but encouraged.”
Normalizing time off will also help employees feel more comfortable using their balances: 28% said they didn’t use PTO last year because they’re afraid of getting fired or hurting their chances for a promotion, according to the Skynova study. As a result of these fears, many employees take what Reinberg calls “pretend time off” — working while on vacation. It’s a problem that stems from company culture.
“As a leader, if you’re unwilling to disconnect from work during your time off, you’re actually communicating to employees that they have to do the same,” Reinberg says. “Culture starts from the top; model the habits you want to see in your employees.”
