How to Incentivize Your Employees to Use Their PTO

Taking time off is mission-critical to employee well-being (and retention). Here’s why and how to encourage your workers to take vacation time.

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How To Incentivize Your Employees to Use Their PTO

Here's what you need to know:

  • Many Americans don’t take vacation days because they feel like they can’t
  • To incentivize your employees to use their PTO, remove the need to give a reason for taking vacation time
  • Discourage — or even ban — employees from working on vacation, and create a system for managing people’s work while they’re out
  • Make taking time off an employee performance goal and consider establishing company holidays to encourage taking time off
  • Lead by example by taking time off yourself as a manager

In 2021, PwC, an audit assurance and tax consulting company, began offering their employees $250 for every week of vacation they take. Employees could take up the offer multiple times, up to $1,000 a year. CNBC reported that the plan would cost the firm millions. But the company told the Wall Street Journal that the move is a result of exhausting other options.

Actually paying employees to take vacation might be a drastic (and expensive!) move. Making this kind of a financial investment isn’t necessarily available to smaller businesses. But the need to incentivize employees to actually take time off is much more ubiquitous.

As Corporate Wellness magazine explains, time off is mission-critical to employee well-being. “Taking vacation can reduce stress, help prevent burnout and promote work-life balance by allowing for more time to be spent with family, significant others and close friends,” the publication notes. “Yet most employees don’t take vacations often enough and many don’t use their allotted paid vacation time.”

In 2018 a record 768 million vacation days went unused in the United States — a 9% increase from the year before. Of those 768 million days, a whopping 236 million of them were completely forfeited and lost.

Why don’t employees use their vacation days?

One of the major reasons that Americans don’t take vacation days is because they feel like they can’t. Often bosses or coworkers make it practically explicit that time off would be bad for the team or career progression.

But sometimes people simply stop themselves from taking time off because of all of the work that would be waiting for them when they return.

This means that it’s the job of leaders and managers to incentivize their teams to actually punch out and reset. But how? Maybe your current vacation incentive strategies aren’t working. Perhaps you’re just looking for fresh ideas. Here’s how to incentivize your employees to use their PTO.

Remove the need to give a reason for taking vacation time

Many people feel like they need to provide a reason for requesting time off. Whether it’s just 1 day here and there or a full-blown vacation, sometimes workers will feel like they need to explain themselves.

One easy way to incentivize the use of PTO is with reminders. Remind your workers that it’s their time to take as they please and that they never have to offer a reason for doing so. Sure, some employees will want to qualify whether or not they’ll be reachable while they’re out. But this is something you should discourage as well.

Discourage — or even ban — employees from working on vacation

This can be a bit of a double-edged sword. If it becomes commonplace for people to work or even just respond to emails while on vacation, this can get in the way of employees taking time off. If you’re going to be working anyway, why spend the time and money to travel?

Encourage employees to completely disconnect while they’re on vacation. Make sure that, culturally and through policies if possible, time off is exactly that — time off.

That said, if there isn’t an effective system in place for managing work while someone is away, taking time off will be tough. Banning work while on vacation can sometimes get in the way of people taking time off.

If there are hard and fast rules about not even checking email while on vacation, it can be a challenge for employees to take time off. If a mountain of work is piling up in your absence, it gets in the way of de-stressing during vacation.

In some instances, it might be more encouraging for employees to take time off if they can stay on top of some of the basics of their work in the process. This reduces the mound of work and stress that will be waiting for them when they get back.

The key here is to deeply understand what exactly is keeping your employees from taking time off and incentivizing accordingly.

Create a system for managing people’s work while they’re out

Task each team or department with coming up with an effective system for managing a team member’s work while they’re out.

Common practices include setting up an out of office email that directs any contact needs to coworkers for the duration of their time off.

Another approach is to set up a hand-off meeting before someone leaves for time off. This helps to ensure that the person taking over their responsibilities while they’re gone is up to speed.

Make taking time off an employee performance goal

By tying time off to performance, it can help to incentivize time off for growth-focused employees who might otherwise struggle with it.

Baking time off into performance also means that time off is something that’s analyzed when it comes to performance reviews. Performance reviews are often routinely scheduled and discussed throughout the year.

This creates consistent touchstones for talking about the importance of time off. This also means that there are consistent opportunities to remind employees of the importance of taking time off and encouraging them to do so.

Another way to keep time off top of mind is to send out vacation balance reminders on a monthly or quarterly basis. This way people are always aware of how much time they have as well as the performance incentive to use it.

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Establish company holidays to encourage taking time off

If you’re really struggling with getting people to take time off, one way that can’t be circumvented is establishing company holidays. Whether it’s a day at the beginning or end of a busy season or an extra couple of days around a holiday, pick a day to close.

By choosing stand-alone days as company holidays, you’re encouraging people to take time off at different times of the year when they might not otherwise. On the other hand, by establishing company holidays around traditional holidays, you’re encouraging people to take more time off at once.

Lead by example by taking time off yourself as a manager

One of the most critical things that managers and leaders can do to incentivize their employees to take time off is to actually take time off themselves. And when leaders and managers are off, it’s important that they’re truly off.

Leaders set the tones and expectations for everyone else. No matter what the policies are, if your manager is always working or is often on email during vacation, they’re setting the expectation that others will follow.

By taking time off — and actually being off — leaders are leading by example.

Especially if you’re a bit of a workaholic yourself, it can be hard to make these adjustments. But they’re necessary adjustments regardless. A lack of time off is associated with physical and mental health ailments.

Time off benefits both your employees and your business

Time off is an important buffer to burnout. Being overworked can quickly lead employees to being burned out. And when people are burned out, they’re much more likely to quit.

Ensuring that your people take adequate time off isn’t just good for your employees, it’s good for business. Start thinking of time off as the business imperative that it is, and that might help ease the transition.

Ensuring that your people take adequate time off isn’t just good for your employees, it’s good for business.

Any business change can be a challenge, but you don’t have to overhaul everything at once. Take it slow. Make 1 adjustment, analyze its impact, and go from there.

If the first thing you try works, great! If not, try something else and iterate. You’ll get there eventually!

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