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3 Ways Employee Vacationing Increases a Company's Productivity Before the pandemic, American workers left a record 768 million unused vacation days on the table.

By Dr. Kira Graves Edited by Amanda Breen

Opinions expressed by Entrepreneur contributors are their own.

While vacationing may seem like a luxury, research reveals it is a necessity. Scientific evidence suggests that employees lead healthier, more productive lives by taking vacations. Despite this, many employees opt out of taking their vacation time. Estimates suggest that there are nearly 130 million full-time workers in the United States. Before the pandemic, American workers left a record 768 million unused vacation days on the table. At an employer's first glance, this might seem like a dream come true. However, employees not utilizing their vacation days can be detrimental to a company's success.

Employees that do not use their earned vacation time tend to be the more stressed out team members. Stress in the workplace leads to increased mental fatigue, job dissatisfaction, anxiety and depression. Brains and bodies need maintenance just like copy machines. Refueling increases physical vitality and mental focus. Additionally, working straight through the year could very well put your employees' health in jeopardy.

Every company is competing for talent, but not every business offers paid time off, much less mandatory time off. The promise of work-life balance and time off that employees are required to use can foster a healthy company culture. This is the very reason multinational companies across the world, including LinkedIn and Mozilla, have introduced company-wide vacations to increase productivity and encourage people to take care of their physical and mental health.

Related: Here's Why Women Take Less Vacation Time Than Men -- and What to Do About It

I encourage my employees to take vacations because I understand just how important vacationing is. I created Kira Graves Consulting to mold and transform minds to realize their true potential through psychological counseling, coaching, research and assessment. I also traveled to over 35 countries to personally examine human behavior, levels of happiness, coping mechanisms and leadership characteristics. My experiences have allowed me to draw several conclusions that might convince you to encourage your employees to take vacationing more seriously.

1. Stimulating employee innovation

Time off from traditional work activities and the opportunity to view the world through a different lens can stimulate your employees' creative muscles. They can explore the scope and potential of their innate talents during the vacation period and get their creative juices flowing. The founder of Instagram, Kevin Synstrom, came up with the idea of starting the social-media platform while on vacation in Mexico. Drew Houston conceptualized the idea of Dropbox while on tour around the world. The next form of innovation for your company could be conjured up while your employee is relaxing on his or her vacation.

2. Evaluating work performance

Employee vacations give the employer a chance to evaluate position effectiveness and make necessary changes. For example, if an employee is mishandling a client, a clerk is handling cash improperly or a supervisor is bullying his staff, these issues could surface while the person is gone. Or if sales increase while a manager is on vacation, this could be a clear indication of a hostile work environment or mismanagement of talent. If sales were to decrease during an employee's absence, it could be a sign that the employee is handling too much and that hiring additional employees is necessary. It is also a great way to cross-train staff, which is better for the company overall.

Related: How Much Vacation Time Should You Be Taking?

3. Providing burnout relief and space to recharge

Working long hours gets very exhausting with every passing day, and sometimes, our bodies just can't take the work stress. It's well-known that tired, burned out employees make more mistakes. That's why pilots and long-haul truck drivers are limited in the number of hours they can work in a day or over several days.

Vacation time gives your employees an opportunity to relax and decompress. Whether your employees go out of town, out of state or out of the country, or enjoy time at home with family and friends, those days away allow them to recharge their mental and physical resources. Without workplace obligations and other daily pressures to focus on, they are able to gain perspective and come back refreshed and ready to tackle their responsibilities again. Moreover, when employers focus on employee satisfaction, it can positively impact employee retention.

Related: Here's Why Every Employee Should Have Unlimited Vacation Days

A study conducted by Glassdoor established several reasons why American workers do not take their vacation. Firstly, there is fear among individuals that their workload is too great and that no one else at their company can do the same work. They might be concerned that they will fall behind or miss out on participating in something important. This is particularly true for those who have high-ranking job positions, as their absence could affect how they are perceived or respected by other employees. Additionally, there is a shared fear among American workers that they cannot afford to pay for their vacation. With this assumption, many employees will not even bother planning for one. Finally, many aren't sure or do not think that their employers want them to take a vacation. Taking a vacation would make it look like they are less dedicated to their work.

Although we can reiterate the importance of vacationing for employees, without action from employers, the status quo will remain. But our bodies are programmed to handle a certain amount of daily stress, and when your employees exceed that limit, they become emotionally drained and exhausted. This is why employers should encourage their employees to take vacations that will allow them to bounce back from everyday pressures. If you're an employer, please educate your employees on the health benefits of vacationing and don't forget the indirect benefits you and your company stand to gain.

Dr. Kira Graves

Entrepreneur Leadership Network® Contributor

Founder & CEO of Kira Graves Consulting

Dr. Kira Graves is a Forbes List member, an executive coach, an entrepreneur and a psychologist specializing in the areas of business, consulting and education. She has a BA from Howard University, a Life/Work Coach certification from UCLA and a Ph.D. in Business Psychology.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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