Posted in Offering health benefits | by: Colin Roper

Paid Vacation Time: How Do You Stack Up?

You put a lot of heart and hustle into your job. And when it’s time to unwind, your vacation time is there to help you out. It sounds simple enough, but depending on who you ask, time off can be the subject of passionate debate. How much is enough? What’s considered generous? And will employees abuse unlimited days off? With policies ranging from unpaid holidays to limitless hours, paid vacation serves as a point of differentiation for many companies, roles, and industries.

Time off isn’t just a fluffy perk; it also benefits the company. A competitive policy is a great way to attract top talent, and encouraging employees to spend time away from the office helps create a healthier work atmosphere. It’s why Gusto not only offers unlimited vacation, but gives every employee a round-trip ticket to anywhere in the world. We want employees to come back from their breaks feeling refreshed, recharged, and ready to take on anything.

If you’re looking to measure the generosity of your company’s time off policy, the nationwide numbers may not be the best guide. A 2013 study by the Center for Economic and Policy Research found that, “the United States is the only advanced economy in the world that does not guarantee its workers paid vacations.” According to the report:

  • Nearly one-fourth of U.S. companies offer no time off. A remarkable 23 percent of Americans have no paid vacations and no paid holidays.
  • 10 is the magic number. The average American worker receives 10 days of paid vacation per year. European countries, by contrast, mandate that employers offer at least 20 days a year. Some EU countries have even upped the requirement to 25 and 30 days.
  • Hourly workers are the exception, but there’s a catch. The bottom 25 percent of hourly workers only get an average of four paid vacation days a year, but the top 25 percent of hourly workers get 14 days.

With such a wide variety of time off policies out there, the Gusto team was curious to see how our customers compared to the national averages, as well as how the numbers varied by state and company size. So we sampled our database and pulled anonymous stats for about 2,500 of our customers. What we uncovered was pretty surprising:

  • Our customers are more generous than average when it comes to allocating vacation. Nationwide, Gusto customers of all sizes offer an average of 10.8 paid days off — almost one full day more than the national average.
  • Gusto customers with 1-5 employees were the biggest givers. Our smallest customers offer their employees the most time off — an average of 14.7 days a year. That’s 4.7 days more than the national average and 3.9 more days than the average of all our customers.
  • Idaho, South Dakota, and Maryland rule the vacation game. Companies in these three states offer employees an average of 22.0, 21.0, and 17.6 days a year, respectively.
  • Alaska, Kentucky, and Mississippi are more work than play. Companies in these states only offer 8.0, 8.8, and 8.9 days a year, respectively.

So, if you’re looking for more time off, maybe you should consider moving to Idaho and working for a small company. Or, employers can go ahead and make the change themselves. No matter a company’s size or location, keeping employees healthy and happy should be a major consideration for any business owner. Clinical psychologist Francine Lederer weighed in on the subject, explaining that, “Most people have better life perspective and are more motivated to achieve their goals after a vacation.”

The benefits of taking time off are also backed by data. An experiment conducted in 2005 showed that construction workers were 24 percent less productive when they worked 60 weeks on long-term projects than they did on 40-hour ones. Anyone who’s ever felt the drag of burnout can attest that this finding doesn’t just apply to physical labor — it’s not only in the best interest of your employees to give them time to relax, it’s in the best interest of your business, too.

About Colin Roper

Colin Roper is a Product Manager at Gusto, where he works on building innovative products that customers love.