Many companies have trouble getting their employees to take time off. Unused PTO is a widespread issue, with more than 750 million unused PTO days in the US each year. Read ahead to learn why it’s a problem and how to fix it.

If you recoiled at the idea that you want employees taking more time off, it’s time for a mindset shift.

Long-term, unused PTO does more harm than good. Employees need time off in order to be healthy, happy and productive. This means regular vacations – more than just a one-week break once a year for the holiday season.

Working a constant nine to five schedule slowly drains a person’s energy. Week to week, they start out with a little less energy than they did the week before. Not so much that it’s immediately noticeable, but over time this becomes a problem.

Many business owners and leaders discourage PTO because they don’t want the short-term drop in productivity. But this kind of thinking actually results in lower productivity (among other issues) over an extended timeline.

The Effect of Excessive Unused PTO

Here are a few problems that arise when employees don’t use the PTO that’s been given to them.

• Employees become overworked and burned out, and the symptoms of burnout, such as decreased engagement, job satisfaction and declining physical and mental health have a detrimental effect on productivity.
• These symptoms also lead to a negative effect on company culture, touching more team members and decreasing productivity further.
• Negative feelings in your workplace may lead to an increase in turnover, which has a clear and quantifiable cost to the business.
• Unused PTO also constitutes a large financial liability, as it generally needs to be paid out when an employee leaves the job.

The key is not just to allow employees to take their PTO, but make it easy, and to actually encourage PTO. Make it clear in your business that vacation time is there to be used.

Here are five ways to boost your PTO uptake, while still maintaining productivity and providing a net benefit to the business.

1: Fix Your PTO Tracking System

The first tip for increasing PTO uptake is to ensure you have an effective PTO tracking system in place.

If this seems like a no-brainer, that’s because it is. If you’ve got a problem, start with the simplest solution, and the simplest here is to make sure you’re tracking PTO uptake and unused PTO properly.

A lot of companies don’t do this. Perhaps it’s because all the information is siloed, and it’s too much effort to go to HR or payroll and get the data you need. Or perhaps you don’t even keep data on used and unused PTO – a common problem for modern startups with unlimited PTO.

They say “what gets measured gets managed”, and the saying is absolutely true. Dynamite Jobs is one example. This remote startup increased their PTO uptake immediately, along with boosting transparency and employee empowerment, when they started using a PTO tracking app in their Slack workspace.

Tracking PTO allows you to know if you have a problem, and which employees in particular are not taking enough PTO. With this information you can attack the problem, but if you don’t even have this much, there’s little you can do to find a solution. 

2: Streamline Procedures for Covering Absent Workers

Probably the most common roadblock in the way of higher PTO uptake is the fear of what will happen when someone is away.

This can mean managers discourage employees from taking leave, or employees themselves become hesitant, because they’re scared of what will be waiting for them when they come back from vacation.

A straightforward way to increase PTO usage is to make sure you have proven procedures that cover when people take leave.

Make sure you have multiple people capable of doing every job, and work on your project management workflow so you have minimal bottlenecks where one person’s absence will hold up others.

When there’s confidence that the job will still get done, everyone involved (managers and employees alike) will be more comfortable with higher PTO rates.

3: Institute a Mandatory PTO Policy

Mandatory PTO is a more direct strategy for businesses to boost PTO usage.

Several major companies, including finance heavyweight Goldman Sachs and tech startup Buffer have chosen to go this route. Mandatory PTO or minimum PTO means there’s a minimum number of vacation days each employee must take each year.

Traditionally, companies do it the opposite way, with a maximum number of vacation days per year, which gives the impression that PTO is a luxury and should be taken sparingly. Mandatory PTO switches the paradigm and enforces the idea that employees need to take regular vacations in order to provide optimal value to the business.

4: Company-Wide Shutdowns

Struggling to force employees to take vacation time, even with mandatory PTO? You can go a step further and do what PwC does. Twice a year, in July and December, they shut the entire company down for a week. This literally forces employees to take, at the very least, two week-long vacations per year.

This may not be realistic for some companies, who can’t afford to completely shut down business for an extended period of time. But for others, this might actually be preferable, as it means employees have more time together to collaborate as much of their PTO is aligned at the same time.

5: Shift KPIs from Attendance to Performance

Our last tip addresses the attitudes towards people taking time off, and employees’ hesitance to take leave because they feel they’ll be punished or looked down upon for it.

In many teams, those with the best attendance rates are seen as high-performers. We love those who are the first in the office, last to leave, coming in on weekends, rarely taking time off.

While this can be the case, we should judge performance primarily on results. The most important thing is that the job gets done, not how often someone is seen around the office.

Making it clear to employees that their tangible production is the most important thing lets them feel more comfortable taking time off, as long as their work is complete.

Most teams can actually benefit from their employees taking a greater number of days off. This will generally lead to happier and more productive employees, and big long-term benefits on company culture and employee engagement.

Whether the issue comes from managers discouraging PTO use, or employees who are hesitant to use their PTO, this is something that needs to be addressed. Following the tips in this article should give you a few ideas that may lead to a more effective and positive workplace.