From the November 2012 issue of Benefits Selling Magazine •Subscribe!

No vacation nation

It was after the trip of a lifetime that Bart Lorang had the idea that made him one of the best bosses ever. 

Looking at photos from his trip to Egypt with his then-fiancée, he spotted one of him on a camel in front of the pyramids—and he was looking at his phone, checking his email.

Seeing how he—and others like him—were workaholics, even on vacation, the CEO of Denver-based Internet start-up FullContact began to offer his employees $7,500 to take a “paid, paid vacation.”

That’s right—atop their normal salary, FullContact employees get an extra (and quite nice) chunk of change to actually fund their vacations. But there are three conditions: One, they have to go on a vacation to get the money; two, they have to “disconnect”—no calls, no emails, etc.—and finally, they cannot do any work of any kind.

“They can use it for whatever they want; I don’t care,” Lorang says. “They just have to take a vacation—they can go hike in the mountains for seven days and not spend a dime. But people are thinking of the money differently, like, ‘Wow, I can actually do this this year.’”

His employees—about 20, with plans to double it over the next six months—are obviously excited about it. 

Jeanette Russell, director of BizOps at FullContact, describes the benefit in a word: fantastic.

“It shows the company’s genuine care for your well-being, and they understand that in the world we live in, sometimes we must be forced or torn away from our work, otherwise we wouldn’t take the time,” she says.

FullContact has a company photo album where employees share their vacation experiences. There have been Costa Rica surfing trips, college football games, and trips to Ireland and Sweden. 

“It gives you the opportunity to be more lavish with your trip. Instead of going for a mountain retreat in Colorado, you could instead go on your mountain retreat in the Alps,” Russell says, noting that with her money she’s planning a trip to Norway.

“They are going to interesting places they would never have thought of going. They think of this money differently,” Lorang explains. “Too many people take a vacation and end up stressing about how much they’re spending.”

Lorang’s right: Last year, about 25 percent of employees responding to a CareerBuilder survey said they couldn’t afford a vacation. 

The $7,500 might seem extra generous, but Lorang says figuring out the amount was all part of a scientific process. It was based on how much money it would cost to take a family of four to Mexico, Lorang explains, and stay at a nice place, eat good food, drink by the pool, etc., for six days, seven nights. 

The benefits of disconnecting

The most important factor for Lorang—the one that’s written in the rules—is that employees have to disconnect from the workplace.

“The key was not just the ‘paid, paid vacation,’ but also tying it to going off the grid and disconnecting,” Lorang explains.

Citing the camel incident, Lorang admits he isn’t good at putting work on the backburner.

“I suck at it,” he says.

But Lorang isn’t the only one. He says his employees also have a hard time with it, especially for the first few days of the vacation, “It’s particularly bad in our line of work because we’re literally always online. We’re sort of early adopters.”

FullContact is a software provider that automates filling in, updating and organizing information for leads and contacts.

“You literally have to shut your brain down,” Russell says. “It forces you to enjoy that time and focus on other aspects of your life—family, hobbies and so on—that may lack your attention due to work.”

Disconnecting is hard for most. According to a vacation survey by Fierce, a Seattle-based leadership and training company, almost half of workers check into work at least every other day while they’re on vacation, and 6.5 percent check in multiple times per day. And, according to Careerbuilder, almost 40 percent of managers expect their employees to stay connected while away.

What’s worse, though, the survey found worker stress isn’t alleviated by the vacation employees desire so much. In fact, almost 30 percent feel more stressed after they return from vacation.

So how do we solve the problem?

A solution to employee stress

One key way to solving it may be to simply allow more—or unlimited—vacation days, some experts argue. Plus, managers need to have conversations about PTO and insist that their employees take a break. 

Despite the small number of vacation days a typical American employee gets, the average worker leaves two days of vacation time unused, in effect handing over $34.3 billion to their employers, according to the travel website Expedia.

By taking days off, employees actually are doing their employer a favor.  According to the 2012 Aflac Workforces Report, stressed-out workers are twice as likely to leave their job as workers who aren’t stressed (43 percent vs. 25 percent).

“Managers may be more likely to afford vacations, but they should still be encouraging their employees to use paid time off, even if they are staying close to home,” says Rosemary Haefner, vice president of human resources at CareerBuilder. “Workers who maximize vacation time are less likely to burn out and more likely to maintain productivity levels. Heavy workloads and financial constraints can make it difficult to get away from work, but even if you’re not traveling far from home, a few days away can have a very positive impact on your health and happiness.”

Employees know it, too. Vacation policies are overwhelmingly important to workers across all ages and industries. The Fierce survey finds 84 percent of employees consider PTO “very important” to their overall happiness, while slightly more consider PTO “very important” to the well-being and company morale.

A new work culture

With the way employee benefits have changed over the years—goodbye, pensions; hello, higher health costs, for example—more companies are thinking more vacation when they think about benefits. It’s a way to instantly boost morale without any extra cost. 

From big name companies such as NetFlix and Best Buy to small startups, more employers are embracing nontraditional paid time off.

One employer doing this is ZocDoc, a company that operates an online service that helps people locate and make appointments with doctors in New York and other larger U.S. cities. They offer their employees unlimited sick and vacation days, as well as flexible working hours.

The benefit is offered “because we believe in treating our employees as adults and feel that no one knows how to manage their time better than they do,” explains ZocDoc public relations associate Stacy Sendler.

“We find that our employees really appreciate this as they all exemplify our core value to work hard,” she says. “Since employees can take infinite days off to recharge, they use them as needed and seem to be more productive as a result.”

To naysayers who worry employees might abuse the program, one viable argument is that employees wouldn’t risk losing the benefit. Plus, employees are still being held accountable for their work—perhaps even more so given the unlimited vacation perk. While employers don’t have to spend their time keeping a running tally of days an employee is out of the office, employees are responsible for getting their work done on their own schedules.

It’s the kind of policy that’s beneficial to both the company and the employees, Sendler says.

Fierce also has put its own techniques into practice by giving its workers unlimited vacation time.

“For any company or organization to achieve success in today’s marketplace, it’s critical to develop techniques, such as delegation practices, that allow employees to take stress-relieving, battery-recharging vacations,” says Fierce CEO Halley Bock. “We’re enabling our staff to disconnect from the office whenever they need to, while still keeping the business running smoothly.”

Though some companies have embraced more time off, too many others haven’t, says John de Graaf, who runs Take Back Your Time, a group promoting worker protections in the U.S. and Canada. In fact, he says he’s seeing “far too much of the opposite,” where companies are stripping their employees of the vacation benefits that they already have.

“Unfortunately, you hear these great stories, but the sad part is we are a no vacation nation; we’re so far behind other countries in that regard,” he says.

U.S. workers on average get 14 vacation days per year, compared to 28 days in Italy, according o a survey by Expedia. Other countries also enjoy more days off for national holidays. Argentines, for example, enjoy a total of 19 national paid holidays. The United States has just 10 national holidays, but for many workers even those aren’t a sure thing. The United States stands alone among industrial nations in providing no legal guarantees of time off or holiday pay—not even for Christmas or the Fourth of July, de Graaf says. 

Recruiting strategy

Besides contributing to a worker’s happiness factor, employers offering such benefits might be benefiting the most themselves.

For FullContact, the ‘paid, paid vacation’ benefits earned nationwide attention when Lorang blogged about it on his website over the summer.

“It was a little bit of a recruiting strategy, but I didn’t expect the international coverage,” he says.

But it’s been good attention—FullContact has had more than 3,000 applications for engineer positions in the past few months, which Lorang says is “unheard of. It’s really an advantage to our company.”

Sure, it’s a benefit that will take a toll on their bottom line, but Lorang just sees it as giving employees a $7,500 raise—which is well-deserved. 

“Talent’s the most important thing in our line of work.” 

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