While some of us daydream about Bora Bora from our cubicles, there are plenty of people who actually refuse to take precious time off from work. In fact, 15% of U.S. employees who are entitled to paid vacation time haven’t used any of it in the past year, according to a Glassdoor survey released in March. Even harder to believe – certain companies are forcing these reluctant employees to get out the door and on to a beach by offering significant cash incentives.
It might seem too good to be true, but just ask any of the employees at Evernote, Zynga, or Netflix – who all pay their employees to take time off. But with certain companies like Google encouraging employees to live, work, and play on-site in the perennial obsession for worker productivity, why are these companies paying their employees to go away and not work at all?
Misguided Hero Complex
Dealing with a weak job market in the aftermath of the economic crisis, workers increasingly felt like they had to show their value and commitment to their companies by working long hours and getting in face-time. Now, even though the employment environment is more secure, a lot of people today suffer from what Lorang calls the Misguided Hero Complex. As he explained, we tend to glorify individuals who are considered “indispensable”– workers who act as martyrs, sacrificing their personal lives to serve the company. Of course, people can get sucked into this and derive their sense of self and value from being depended upon. “It’s almost like you have this adrenaline rush, brought on by the fact that people need you 24/7,” Lorang says.
The Danger of Employee Burn-Out
But this organizational psychology - where workers feel guilty for taking their allotted vacation time - can have real consequences not only for the employee, but also the companies they work for. Studies by the Finnish Institute of Occupational Health have found that overwork and the accompanying stress can cause impaired sleep, depression, heavy drinking, diabetes, impaired memory, and heart disease.
These health outcomes obviously harm the individual, but also manifest in the workplace as absenteeism, turnover, and rising health insurance costs. Additional research showed that employers could not discern any noticeable difference between the output of workers who logged 80-hour and 40-hour weeks. In sum, the story of overwork is one of diminishing returns: overwork leads to employee burn out and negatively impacts the bottom line.
Time Off Creates a Process
Lorang saw the toxic effects overwork was having at his company, FullContact API, and the toll it was taking on his own employees. That’s why he implemented his radical paid paid vacation policy: a $7500 bonus for getting out of the office, on top of standard paid vacation. The only caveat: you can’t answer email while you’re away. Lorang observed that even while on vacation, workers go to great lengths to make themselves available, making phone calls and checking in with team members for updates. He believes that this runs counter to the purpose of vacations: recharging and refocusing.
With the evidence pointing to higher productivity, stronger workplace morale, greater employee retention, and significant health benefits, it’s no wonder other companies are following suit and mandating that their workers kick back and relax.
There are several other reasons companies have for ensuring their workers take a break. Many major banks require their employees to take at least two consecutive weeks off in order to check the books and safeguard against embezzlement, fraud, and rogue trading. For Lorang, mandating vacation has a very different purpose: creating a system that encourages employees to delegate duties and keep company projects running in their absence.
He pointed to a personal anecdote when a project run by one employee broke down while he was vacationing in Europe, causing havoc for his co-workers. Lorang says the new company policy de-risks the workplace two-fold - encouraging employee retention while mitigating the consequences if they do quit or are unexpectedly absent from work.
So employers might want to think twice before they laud the last person to leave the office at night: it might be the person on vacation who is the real hero.
Peter Cappelli is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School of the University of Pennsylvania in Philadelphia. His latest book is "Will College Pay Off? A Guide to the Most Important Financial Decision You'll Ever Make."
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