November 24, 2014

Are You A Use-It-Or-Lose-It Company?

By Paul Bieber

Or do you let your employees carry over vacation from one year to the next? Maybe somewhere in the middle? Whatever you are, here comes crunch time. In the Use-It company, many people will be taking time off in December, because they have earned the time off but have not taken it so far this year. Your scheduling goes out the window, along with customer service. 

It is easier on your bookkeeping to say that there is no carryover, but how about trading 20 hours of bookkeeping time over a year to have a happier work force. In my speaking with employees of many glass companies, one of the major beefs is “use it or lose it.” They’ll complain that they can’t take their vacation when they want to because of business pressure, or another employee with higher seniority has asked for the same date. And then they feel like second-class people when they are forced to take their vacation in December when they don’t want to. Or lose it. Which many folks do, and the bitterness that stays with them sours the next year.

You don’t wan’t a free-for-all either, where an employee can take a vacation whenever they want. You do need to schedule appropriately to make sure customer service needs are met. So what do we do that might solve all sides of this riddle? When consulting, I propose this formula to clients:

One week of vacation              Must be taken in year earned

Two weeks of vacation            Up to one week may be carried over up to June 30 of the following year

Three weeks of  vacation         Up to one week may be carried over up to June 30 of the following year

Four weeks of vacation            Up to two weeks may be carried over up to June 30 of the following year

Sometimes people want to save up vacation to take a long trip; they may be preparing for a child’s wedding next year, or any of hundreds of valid reasons. Bend with this one, and you will see a great positive result from your workforce. An employee still needs to properly schedule that time with you, no matter how many weeks they have stored up.

But wait, what’s the downside? A little bookkeeping and some follow-up time with each employee to make sure they know what they have left-over and when June 30 is on the calendar. Most companies pay for unused vacation when an employee leaves giving proper notice. You may end up paying at this year’s rate for last year’s vacation. Okay, one week’s pay at a probable 3-percent raise is not going to break the bank.

Speaking of break the bank, do you allow your employees to work through a vacation week and get an extra week’s pay? I normally don’t recommend this practice. As a business manager, suddenly you have 53 weeks of payroll in a 52 week year, and that can really blow a budget if a lot of folks take you up on this. It is also a good idea to get people away from work to recharge their batteries. But the best reason for making folks take vacation is that it forces you to cross-train your people to take over someone’s job. This gives you a fresh view of a work task, which can be enlightening in oh-so many ways. In an emergency situation, you might let someone work through vacation, but now you have set a precedent and others will ask. You are probably better off just giving the employee a gift of some money than opening the Pandora’s box of work-through.

Next week, we’ll talk more about new trends and ideas in vacations that help build employee morale, and don’t really cost you anything except some very minor bookkeeping. 

Have a great Thanksgiving, and enjoy the turkey and the family.