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5 Reasons Companies Should Encourage PTO

5 Reasons Companies Should Encourage PTO

Libby Zay

5 Jan 2022
4 minute read
Blog Image // 5 Reasons Companies Should Encourage PTO in 2022

Job seekers consistently rank PTO as one of their most-desired benefits, yet American workers regularly use only about half of their eligible vacation time. Around 80% of employees say they would take more time off work if they felt supported and encouraged to do so by their employers. Here are five reasons why encouraging PTO is not only good for employees but also good for business—and essential for company survival in this competitive job market.

1. Combat Burnout

Overworked employees are less happy, less engaged, and less productive than those who have a good work-life balance. On the flip side, after taking a vacation, employees report feeling more positive, more energized, and more productive. Research finds that for every 10 vacation hours a person takes, average performance reviews are 8% higher. It's all proof that taking time to recharge allows employees to return to their jobs reinvigorated and ready to give their best at work.

Those breaks from work need not be long, either; experts say that taking short vacations throughout the year may be more beneficial to mental well-being. For those who travel for work, tacking on a few extra days onto a business trip can help cure burnout. And for companies using Navan, employees can extend their business trips with just a few clicks or taps using Navan Personal Travel.

2. Boost Creativity

Vacation time also helps employees come back to their jobs more inspired. CEOs consistently rate creativity as the most important trait for incoming employees, and research shows that exposure to new and different experiences—like those often encountered during travel—leads to new ideas and insights.

Slowing down and unplugging also has creative benefits. Participants in one study scored 50% better on a creativity test after a four-day, tech-free hike in nature. Downtime is a boon to creativity, too: Brain imaging studies find that being idle, daydreaming, and relaxing "creates alpha waves in the brain that are key to creative insights and innovative breakthroughs."

3. Increase Recruitment and Retention

The U.S now has a record number of job openings, and employers are faced with two challenges: finding ways to attract new talent and enticing current employees to stay. A recent survey found that after health insurance, employees place the highest value on benefits that offer flexibility and improve work-life balance, including more paid vacation time.

EY (formerly Ernst & Young) found that for every 40 hours of free time an employee takes, their tenure at the company increased by eight months. Why? After returning happy and well-rested from vacation, employees feel more positive about their workplace—and those who are satisfied with their job and engaged in their work are more likely to stay with a company.

4. Support Teamwork and Collaboration

Employees often feel discouraged from taking PTO because disconnecting from their jobs seems like too big of a challenge. In fact, 60% of employees report working while on vacation---a signal that many workers feel like they can't completely switch off. On the other hand, when employees know that their work is covered during their absence, they're more likely to pitch in and support their colleagues' time off. This delegation of responsibilities and knowledge sharing among colleagues not only fosters teamwork but also promotes cross-functional collaboration.

In the end, the company benefits from better business continuity and is well-prepared in the event that an employee is unexpectedly absent. In other words, encouraging employees to take their PTO—and to disconnect from work completely—could have a positive ripple effect across an organization.

5. Save Money

Companies can even realize cost savings when their employees are encouraged to take vacations. Overworked employees are prey to fatigue, poor health, and stress—all of which can lead to an increase in workers' compensation and health care costs. Employee turnover is costly, too. Some studies predict that every time a business loses a salaried employee, recruiting and training someone new costs the equivalent of 6 to 9 months' salary.

If a company pays out former employees for the PTO they did not take, it directly affects the company's bottom line. Adopting an unlimited vacation policy or encouraging employees to use their earned vacation time within the calendar year can protect the organization's balance sheet. Another tactic is to offer employees a stipend for personal vacations; a Skift + TripActions report found that 25% of corporate travel decision-makers plan to do so in the coming year.

Ready to encourage employees to take their PTO? Companies that use Navan as an all-in-one travel, corporate card, and expense solution have the added benefit of allowing employees to book personal travel through Navan Personal Travel. Let employees know they have free access to 24/7/365 assistance from global travel agents, millions of travel deals, and personalized suggestions based on their favorite loyalty brands.

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