In an attempt to retain loyal employees, many organizations have a vacation carryover policy in place that allows employees to carry over earned vacation time from one calendar year to the next.
Among small businesses with fewer than 100 workers, 69% offer paid vacation to their workers (US Bureau of Labor Statistics, 2012). The average vacation days per year vary from company to company. Employee vacation days are important to both the employees who earn them and the company that provides them, for various reasons.
Reasons You Want a Vacation Carryover Policy
- Avoid burnout. Employees who aren’t able to relax and unwind—at least on occasion—cannot work at maximum efficiency because they can get burnt out physically and emotionally. Most companies that offer vacation days really want their employees to take advantage of the time off so they can return to work with fresh ideas and a refreshed frame of mind.
- Freedom to plan ahead. Sometimes all the vacation days aren’t needed within the course of a calendar year. That is when it’s beneficial to employees if the employer allows them the option of carrying those days over into the next calendar year. This also gives employees an opportunity to plan for a future vacation or a personal event that requires them to take time off from work.
- Balance employee wants with business needs. As you consider the advantage of retaining a good employee by, for example, giving “Bill” the chance to finally take that private island vacation he’s always dreamed of, keep in mind the needs of your business. What problems could arise from Bill being gone for several consecutive weeks? Maybe you need to be considering some cross training?
- In case the economy crashes. What happens when the economy crashes? Unfortunately, some companies may need to let employees go. If a company does not have an effective written policy regarding vacation carryover, the company may have to pay employees for all vacation days accumulated at a time when finances are already stretched. So it’s important to have a written employee policy that allows vacation carryover to an extent, but also limits the number of days that may be carried over.
Vacation Carryover Takeaway
- One way to retain productive employees is to enable them to maintain a healthy work/life balance.
- One way to lose a productive employee is to allow them to become a burnt out employee.
- Unfortunately, small business owners have to be prepared for uncontrollable, unpredictable disasters. Do you need a written vacation carryover policy in case the economy collapses, and you have to let people go?
- As you consider a vacation carryover policy, consider how an employee’s extended vacation might impact your business.