Are unused leave days impacting employee productivity?

Historically, an employee who works hard all year round and never takes a vacation has been viewed as a real asset to their organisation and a valuable member of the team.

However, a new study is challenging that long-held belief by arguing that unused annual leave days may actually be having a significant impact on both employee productivity and the health of the economy. 

Oxford Economics surveyed 971 American workers in order to determine how paid vacations are perceived and used in the USA – and the findings have significant implications for Australian employers as well. 

According to the report, around 40 per cent of American employees had unused Paid Time Off (PTO) on their records at the end of 2013.

It is estimated that these vacation days, if used, would have benefited the US economy to the tune of an additional US$67 billion and created approximately 1.2 million additional jobs. 

More importantly for employers, Oxford Economics has noted that allowing workers to take PTO can be a productivity solution in and of itself, as paid leave actually results in productivity gains both before and after the holiday.  

"While PTO is costly to the employer, and clearly there is a loss of productivity while the employee is away from work, these results indicate that net productivity, after taking into account the downtime of leave, is still positive," reads the report. 

However, the USA is not the only country facing problems with workers leaving paid leave days unused. A study conducted by Expedia in January found that the average Australian employee did not use five out of their minimum 20 potential annual leave days in 2013. 

Across 11.6 million Australian workers, this resulted in approximately 58 million days of annual leave being unutilised last year.

"Not only are holidays beneficial for our personal life, but rested employees are more productive employees, so companies should be actively encouraging their staff to take regular vacations. You can't over holiday!" said Expedia travel expert Kelly Cull in a statement. 

If your recruitment agency is looking to encourage employees to take more paid leave, consider investing in specialised workflow automation software that can reduce their daily workload and improve overall work/life balance. 

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