A vacation policy for today’s workforce

Between Cathy’s contingency division and our retained recruitment projects, Right Recruiting filled over 70 positions in 2015. That means I had over 70 conversations with companies and candidates about vacation policies. Based on what I’ve seen, what I’ve read, and what I’ve learned, I think employers are really missing a significant opportunity to improve professional level employee performance and happiness. And, I think there is something about vacation benefits that employers are missing because they are too close to the issue or are looking at it solely through an accountant’s eyes.

 

Vacation time is part of the compensation package that employers provide to professional level employees, one of many components to that package. The irony is, that while vacation time is often as symbolically important to employees as salary, it is, as I will explain later, the cheapest thing that employers can provide. While health and other benefits can be complicated to compare against another company’s; salary and vacation time are easily understood numbers. So, it’s simple for a potential employee to compare vacation policy of current versus new employer. This becomes dangerous, relative to recruitment, when you realize that most recruits will have more vacation time with their current employer than what a new employer is willing to provide. Benefits stay the same for most people but salary and vacation increase over time. I would say about half the people we recruit take cuts in vacation time to take a new job. Those cuts are often painful, but some people will take them, grudgingly, for a new opportunity. Some, though, will not. A fresh employer perspective is required.

 

Here is what each person told us when we contacted them:

 

1. Every survey we have seen tells us that most professional employees do not use up all of their vacation every year. That they do that by choice, out of commitment to their job and peers, is a safe assumption.
2. Even when on vacation, most employees make themselves accessible for emergency or general questions, at least via email, if not via phone.
3. Most employees work hard to clean up projects or assignments before leaving for vacation because they want to avoid problems for peers or a backlog for themselves when they return.

 

So, if all of the above points are true, does it really make sense for employers to be stingy about vacation time, and dig in their heels about negotiating? Why is it so important that a prospective new employee drop their vacation from four weeks to two weeks vacation just because it is your policy? Based on the three points above, it’s logical to conclude that a fight over vacation is a fight over a part of compensation THAT THE PERSON WILL PROBABLY NOT USE ANYWAY! It is the cheapest thing for an employer to give away. What’s the big deal?

 

I know some of the answers. I hear them from employers all of the time. Here what they tell me:

1. Policy, as in, we’ve always done it this way. What do we say to people we’ve hired in the past?
2. How about the hourly part of our workforce? They use all of the vacation we give them. This analysis would not apply to them. What do we tell them when they see professional employees getting more vacation then they get?
3. What about the professional people who use all of their vacation, are not accessible when they are away, and who do not clean up their projects when they go? They would be a drag.

 

These are good answers. I heard every single one of them in 2015. Here are my comments:

1. There are a lot of things that you’ve done in the past that you have changed. Benefits change, working environments change. Furthermore, like salary, vacation time is no one else’s business. If someone who got hired in 2005 is complaining about the vacation of someone who was hired in 2015, that person has too much time on his or her hands.
2. Your hourly work force is not working 12 hours a day on projects without overtime and is not getting phone calls at home at 8PM at night about issues. Salary and hourly get paid differently and vacations are a part of compensation. To tie your professional vacation policy to hourly staff vacations is, frankly, a disincentive to be a professional.
3. Most companies spend a lot of money on consultants to help them decide who to promote and who not to promote. What could be a better indicator of effort and commitment than the ability to remain part of the team while away? The drag from an employee who is fully absent while on vacation is a small price to pay to reveal which team member is truly committed to professional excellence. Think of it as rewarding someone who performs beyond the norm. Rewarding one person is not punishing another.

 

I would propose a new way of looking at vacation benefits. I think employers need to look at it like salary. When employers say, “I want to hire someone for this job with at least 10 years of experience,” they usually do a salary survey and decide on an appropriate compensation level for someone at a 10+-year level of experience in that job. Basic HR, right?

 

Well, why not do a survey of what employers provide for vacation time for people with 10+ years of experience and make that a part of the compensation like salary? A junior job would have a lower salary and less vacation, a senior job a higher salary and more vacation. A person makes more money as they get more experience, and that person usually gets more vacation as they get more experience too.

 

I know it is easy to suggest that other people spend more of their money on your ideas. That’s what consultants do, right? But, if you are an employer reading this, please remember that I am suggesting altering the one part of the compensation package that will be cheapest for you to change. People take all of their salary but they often don’t use all of their vacation. That is an easy tradeoff if you can avoid getting into any short term or legacy traps about how you always used to do things in the past.

 

I hope this has given you a new perspective on how to approach people to get the most out of recruitment in 2016 and beyond. As ever, thanks for getting this far and don’t forget Right Recruiting for all of your recruitment needs.