HR pro Tim Sackett is here to break down the top human resources issues that affect small businesses. Have a question for Tim? Tell us about it here.
Every year, American employees leave 430 million vacation days up for grabs. (If you were wondering, that’s 1,178,082 years of unused vacation every year.)
Or in other words, way too much time.
We already know Americans are by and large workaholics. But still, if you own a small business, there are some days you should definitely give off to your employees. And it’s helpful to know what that mix of days should be.
That’s where I come in. I’ll show you how to build your own paid holiday schedule for your small business, using benchmarking data as our trusty guide.
The bigger PTO picture.
Let’s start with the main question on your mind: How much time off do people normally get? An average full-time employee in a small, privately-owned business in the U.S. receives about 7.6 paid holidays per year, according to the Bureau of Labor Statistics. That number also breaks down even further:
- Technical/professional employees get 8.5-ish days a year.
- Clerical/sales employees get 7.7-ish days a year.
- Blue-collar/service employees get 7 days a year.
While that’s the average, other studies have shown most employees report getting about nine paid holidays per year. Think about these benchmarks as you decide on the number that will work best for you business.
There are no federal laws requiring employers to give PTO, but most companies offer it anyway. Why? Because it’s a must to attract and retain great employees. In fact, PTO is the second most important benefit to employees, right after health insurance.
Now, onto the next layer of the paid holiday puzzle: Choosing the actual days you give off.
What paid holidays are normally handed out?
According to the Society for Human Resource Management, most employers offer the paid holidays listed below:
|Holiday||Date||% of employers who offer it|
|New Year’s Day||January 1st, 2019||95%|
|Memorial Day||May 28th, 2018||94%|
|Fourth of July||July 4th, 2018||76%|
|Labor Day||September 3rd, 2018||95%|
|Thanksgiving Day||November 22nd, 2018||97%|
|Friday after Thanksgiving||November 23rd, 2018||76%|
|Christmas Day||December 25th, 2018||97%|
Some companies also include Easter in that list. Since Easter always falls on a Sunday, that works for certain businesses (like retail), but not others (like an office).
What else can I do?
There’s a grab bag of other possibilities. They include:
|Holiday||Date||% of employers who offer it|
|Martin Luther King Jr. Day (MLK Day)||January 15th, 2018||37%|
|President’s Day/Washington’s Birthday||February 19th, 2018||35%|
|Good Friday||March 30th, 2018||28%|
|Day before Fourth of July||July 3rd, 2018||60%|
|Columbus Day/Indigenous People’s Day||October 8th, 2018||16%|
|Veterans Day||November 12th, 2018||20%|
|Christmas Eve||December 24th, 2018||47%|
|Day after Christmas||December 26th, 2018||26%|
|New Year’s Eve||December 31st, 2018||23%|
If you offered all these holidays above, it would come out to 14, which is double the norm.
How to mix and match (and think about all of this).
Here are three approaches to mixing and matching your holiday stash:
1. Offer two floating holidays in addition to the first list.
That would bring an employee to nine paid holiday days. They can choose which two of the potential floating holiday options (largely the second list) makes the most sense for them, their beliefs, their family’s vacation schedule, and other factors.
2. Work-from-home days.
Turn some of those holidays into WFH (or WFH-optional) days where employees are expected to be online but don’t have to come to the office. This is not a reduction in work time, but it is a reduction in the necessity of seat time.
3. Contextualize the time of year.
If you sell children’s toys, yes, perhaps the period right around Christmas might be very busy for you. If you sell insurance, it’s probably less so. So keep your busy seasons in mind when crafting your holiday schedule.
There are also some parts of the year where the natural cadence of your business will slow down—and the corresponding need for family time will ramp up. At these times, it’s okay to take your foot off the gas and offer up some more days if it works for your bottom line.
So, what should I offer?
One thing HR experts agree on—offer the big six for sure. That’s a must for most small businesses. At a bare minimum, you want to offer those days to keep your team happy. After that? It’s your call.
- The day after Thanksgiving is a must.
- If you want to be better than average, throw in Christmas Eve and New Year’s Eve. Now you’re at nine.
- If a holiday falls on a Thursday, Friday, Monday, or Tuesday, consider adding an extra day to turn it into a four-day weekend.
Want to get really crazy? Consider giving all your holidays as PTO and letting your employees pick the days they want to take. This takes religion off the table and gives your team some freedom over how they take their PTO.
If you go that route, just make your employees pick the holidays up front. Only allow them to change once per year, like the same date you do your benefits open enrollment. Otherwise, you’re dealing with an administrative nightmare.
The next step? It’s your call. Slot the holidays that matter into your company calendar and share it with the team. Now, there won’t be anymore shrugs when a holiday swings around.
The opinions expressed in this article are those of the author and do not necessarily represent Gusto’s views.
This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business.