How Working from Home Affects Time Off Policies

Taking Time Off While Working from Home

If you’re like millions of Americans, you started working from home in March 2020 due to the unprecedented health crisis that was affecting the entire world.

One of the countless side effects of this massive switch to remote work was how workers used—or, more likely didn’t use—their time off.

Millions of employees across the country cancelled travel plans, holiday gatherings, weddings, and a whole host of other get-togethers and celebrations. That meant many were left with a glut of vacation time or PTO (personal time off) days on their hands.

After all, why take off work if you can’t leave the house anyway?

Now we’re seeing that the once temporary working-from-home solution will become a permanent reality for many.

This migration from an on-site to remote workforce is forcing companies to reconsider their time off policies. According to SHRM, 42% of firms have made, or are planning to make, changes to their time off policies. But exactly how will working from home will affect employers’ time off policies in the long-term?

The Importance of Time Off

Taking Time Off While Working from Home

Before we get into how working from home will impact time off policies in the workplace, let’s remind ourselves of just how important vacation time is for both employees and employers.

The fact that employees value their time off isn’t surprising news. However, time off benefits employees in ways you may not have realized:

  1. People who use all of their vacation time are more likely to produce high-quality work and therefore receive more promotions, raises, and bonuses than their peers who skip vacations.
  2. Employees who take vacations tend to be less stressed, happier, and more satisfied with life. That means, when they are at work, they are more productive and able to come up with creative solutions to challenges.
  3. Paid time off enables employees to maintain a satisfying work life balance. Parents especially appreciate the ability to take the time they need for appointments, school functions, teacher conferences, and more. 81% of parents ranked work-life balance over salary when it comes to what they want in a job.
  4. Stress due to overwork can increase the risk of heart disease, stroke, anxiety and depression. Time off is good for physical and mental health.

There are also several reasons why providing time off to employees is beneficial to employers as well:

  1. Paid time off results in lower levels of unscheduled employee absences. Lost wages due to unscheduled absences cost employers more than $1,650 per employee, per year as per the CDC.
  2. Productivity decreases when employees work without time off. Months of work without time to take a break, recharge, and refresh will yield diminishing returns. Employees are less able to think creatively and generate high-quality work.
  3. Without ample vacation time, employee burnout becomes a reality and that leads to higher turnover rates. Employee turnover is very expensive as employers have to pay to find, hire, and train replacements. It’s much less expensive for employers to retain employees with robust compensation packages, including ample time off, than it is to hire new ones.

Solving the Time Off Challenge

Taking Time Off While Working from Home

It’s interesting to note that companies seek to solve the issue of excess vacation days among employees that work from home in different ways.

For example, many organizations have adopted a “use-it-or-lose-it” approach to time off. They may have once allowed employees to carry over some or all of their leftover vacation days year after year. The hope is that by eliminating the carry over, employees will be more likely to take the time in the year it’s allotted.

While that does provide the built-in incentive for employees to use their time, there are a couple of downsides to this approach. First, some employees may grow to feel resentful since it feels like a benefit is being taken away from them. Secondly, business owners may see attendance decrease sharply in November and December as employees race to use their days.

Other companies, however, are moving in the completely opposite direction. Instead of a use-or-lose model, they are moving to an unlimited PTO approach. This is still a relatively new practice, with just about 5% of U.S. companies testing out unlimited PTO policies.

Ironically, one of the biggest problems with offering unlimited PTO is that employees wind up taking less time off than if they were offered the standard two weeks of vacation. There are two main reasons for this. First, they don’t want to be seen as abusing the unlimited PTO policy. Second, when there’s an abundance of days off, the urgency to use those days off goes away.

Finally, some companies offered cash payouts to employees who didn’t use all of their vacation time in 2020. They didn’t want their employees carrying over so much time into 2021, but they also didn’t want to simply take away the benefit, especially after such a hard year.

Of course, this may be a one-time concession for most companies who went this route. Offering money to those who don’t use all of their vacation days will just incentivize workers to not use their time off.

We All Need a Day Off

Taking Time Off While Working from Home

There’s no denying that time off for employees is important for the health and well-being of the employee and the employer. However, working from home is certainly no vacation, nor does working from home decrease the need for employees to take a break.

Working from home may change how employers’ time off policies are set up, but employees whether working on-site, at home, or both are entitled to time off.

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Maria Gold is a Content Manager/Writer for Empire Resume. She is dedicated to helping educate and motivate people with the latest career articles and job search advice. Her interests range from writing to programming and design. She is also passionate about innovation, entrepreneurship, and technology.

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