Four Data-Backed Reasons Why Taking Time Off Can Save You Money

David Sturt,Todd Nordstrom, Contributor, Forbes
June 21, 2017

It’s that time of year. Kids are wrapping up school. The flowers are blooming. And, you’re contemplating summer vacation. Whether you dream of sticking your toes in a sandy beach, storming through sight-seeing activities, climbing a mountain or staring at the end of a fishing pole, the vacation season is looming. The question is, will you do yourself a favor and save some money by taking that well-deserved vacation?

How can a vacation save you money? That’s a good question.

Strangely, when Gallup shows that nearly 70 percent of employees are disengaged, other studies show that only 55 percent of Americans actually use their paid vacation to escape that disengagement — the monotony, the bad boss, the office politics or the irritating coworkers.

Of course, we could discuss how the United States stands virtually alone in the world for not requiring employers to provide paid vacation time.

Plenty of research makes a solid case for improving our wellbeing by taking vacations. Canadian researchers Joudrey and Wallace studied 900 lawyers and reported that “active” leisure pursuits and taking vacations helped to buffer job stress. Clinical psychologist Francine Lederer, a specialist in stress and relationship management, said, “The impact that taking a vacation has on one’s mental health is profound. Most people have better life perspective and are more motivated to achieve their goals after a vacation, even if it is a 24-hour time-out.”

Of course, we could also use an emotional argument to sell the value of taking a vacation — the quality time spent focused only on our loved ones, the cherished lifelong memories — not to mention all the awesome photos you can post on Instagram.

All of the above are valid arguments as to why you need to take a vacation this summer. However, sadly none of them actually seem to force, or inspire, Americans to take their well-deserved vacation time. But, maybe this next argument will.

According to a study by Project: Time Off, “over the past 15 years, American workers have been taking less and less vacation.” The survey studied 5,641 workers, including 1,184 managers who were decision makers in their respective organizations. And, although most workers intend to use their allotted vacation time, the report suggests that 658 million vacation days remain unused in this country annually. And, because many companies don’t allow unused vacation days to roll into other years, 222 million vacation days are forfeited, equating to $61.4 billion in lost benefits. That’s a big number. Why are we letting it go?

Research conducted by travel website Expedia showed the top reason employees give to why they don’t use their vacation time is “work schedule doesn’t allow it.” And a survey by Travelers Today, a research group specializing in public affairs and opinion polling, found the top three reasons employers say they don’t use their vacation days are:

  1. A fear of returning to a mountain of work (40 percent)
  2. The belief that nobody else can do the job (35 percent)
  3. The inability to afford taking time off (33 percent)

While all of the above reasons may sound suspiciously familiar to many of us, your vacation days are part of your compensation plan, and not using them literally means you’re rejecting money that you earned. The math is simple (daily compensation x unused vacation days = money you’re refusing).

“It’s not just about the money I leave behind,” Julienne, a manager at a San Francisco-based tech company, told us. “But, it is about money. I’m actually scared that taking vacation will make it seem like I’m not dedicated, and therefore won’t get raises and promotions.”

Julienne’s concern isn’t abnormal. Roger Dow, president and CEO of the U.S. Travel Association, says 28 percent of workers surveyed said they’ve declined to take earned days off in order to illustrate their dedication to the job. “But it does them no good whatsoever,” he says. “People who take more time off tend to get more raises and promotions.”

Dow is right. The research conducted by Project: Time Off revealed something that might make you reconsider assumptions that taking less vacation increases your opportunities at work. “Employees who take 10 or less days of vacation time are less likely to have received a raise or bonus in the last three years than those who took 11 days or more.”

So, let’s recap why you can’t afford NOT to take a vacation.

  1. It’s good for your well-being, as it lets you de-stress and recharge.
  2. It’s good for your relationships and emotional health, as you create memories.
  3. It’s compensation you earned that you forfeit if you don’t use it.
  4. Your odds of getting a raise or a bonus actually increase if you take time off.

Do the math. It actually could cost you more money and opportunities to stay at work this summer. Oh, and if you’re the boss, anxiously watching your workforce exit the building as they leave on vacation, consider this final tidbit. Mark Rosekind, a researcher at Alertness Solutions, found that the respite effect of a vacation can increase performance by up to 80 percent. Think about how an 80 percent increase in performance could impact your results. Now tell your team to take a well-deserved break.

This article was written by David Sturt and Todd Nordstrom from Forbes and was legally licensed through the NewsCred publisher network. 

The information in this article is presented as-is and does not necessarily reflect the views of First Republic Bank.