One of the core responsibilities of leaders is to stay attuned to the evolving needs of their workforce, allowing the companies they serve to implement strategies that both attract and retain talent, thereby aligning with their business objectives.

Beyond the allure of higher wages, a significant concern for workers centres around paid time off or vacation policy. This is a policy that ensures that your employee is taking their much needed and well-deserved break. This vacation policy ensures that you understand your staff’s need for rest while ensuring that your business is running smoothly.

When employees find themselves overwhelmed and stressed, it can lead to burnout. Many employees fail to take adequate time off, citing various reasons that vary from individual to individual and from workplace to workplace.

In fact, a study by Pew Research shows that only 46% of people take less time off than the amount of leaves given to them. In Australia alone, only around 25% of workers are fully using their annual leave credits, according to a research by the ELMO software company.

A key deterrent to taking time off often stems from the vacation policy (or the lack thereof) within their place of employment.

Establishing an appealing company vacation policy can play a pivotal role in ensuring that your employees can enjoy well-deserved time off.

What is a vacation policy?

A vacation policy, often referred to as a paid time-off (PTO) policy, consists of rules that outline the amount of leave employees can take within a specific time frame, typically within a calendar or fiscal year.

The duration of leave an employee is eligible for typically depends on factors like their job role and length of service. There's no universal policy that fits every business, so it's crucial to tailor it to your specific company needs.

Why vacation policy is important in the workplace

Having a vacation policy in place is really important. It helps your employees know how much time they can take off each year and how to request it. Plus, it comes with a bunch of great benefits.

First off, it shows your employees that you care about them as individuals, not just as workers. Encouraging your team to take time off has some awesome advantages:

• It lets them achieve a better work-life balance.
• It encourages healthy habits.
• It boosts their energy and productivity.
• It builds trust and reliability.

When you create a workplace where people can take time off, they're more likely to stick around. They feel valued, which makes them want to put in their best effort. Vacations give them a break from work, so they come back refreshed and ready to tackle any challenges. This boost in productivity also lifts morale and makes the whole work environment better for everyone.

Read more: Bleisure travel: is it a good idea to work while on holiday?

How to craft a vacation policy that will attract and retain talent

Here are some suggestions for crafting a vacation policy that suits both you and your employees:

Make it attractive: Many folks hesitate to take their earned vacation days for various reasons:

• They believe there's too much work piling up.
• They worry about being judged by their colleagues for being absent.
• They fear that things won't run smoothly in their absence.

Your vacation policy should address these concerns by ensuring that tasks are adequately covered and work continues smoothly even when employees take time off.

Give them the specifics: Your vacation policy should lay out all the nitty-gritty details about taking time off. It should cover things like:

• How many days off employees can take each year
• How much advance notice employees should give when planning a vacation
• Who needs to be informed when an employee plans to go on vacation
• Whether vacation days increase with an employee's tenure
• Whether unused vacation days can be carried over to the next year

The specifics you include will depend on your policy, but it's crucial to have everything clearly documented so that every employee knows how they can take a well-deserved break.

Why you should encourage your employees to go on vacation

In your policy, make it crystal clear that your company actively supports employees taking time off during the year. Some employers might worry that vacation time eats into profits, but that's not the case. In reality, employees perform significantly better when they have the opportunity to take a break. Taking time for vacation can bring about several advantages:

Increase mindfulness: When employees go on vacation, they break away from their daily routines and habits. This break allows them to be more mindful and engaged, even when they return to work.

Boost creativity: Creative ideas often flourish when the mind is relaxed and at rest, which often occurs during a vacation. So, vacations can help employees come up with fresh ideas and become more creative.

Promote heart health: Encouraging your employees to take time off can contribute to their overall health. Studies have shown that those who take vacations more frequently are less likely to develop health issues such as heart disease and other cardiovascular problems.

Improve sleep: Many employees experience work-related stress or work late into the night, leading to sleep problems. During a vacation, employees can disconnect, which in turn helps them sleep better.

These benefits can lead to improved employee performance throughout the year.

Ultimately, encouraging vacation policies benefits both employees and employers, creating a positive workplace culture that enhances overall productivity, job satisfaction, and company success.