Work Signals

The average American worker gets 14 vacation days a year and only uses 12 of them. That adds up to 226 million unused vacation days, or approximately $34.3 billion dollars of work. That’s amazing. It’s not that surprising though as we are in one of the worst periods of unemployment in quite some time and many people are probably cutting back on vacation days in order to be more productive. It’s not exactly fair but it’s human nature, if I’m concerned about getting fired then the last thing I’m going to do is take a vacation day. (more)

For workers ages 55 and older, the survey found that nearly 30 percent have between five and 10 vacation days left over at the end of each year. Further, it found that only a quarter of workers 55 and older had used up all of their allotted vacation time by year’s end. (more)

66% of employees failed to use up their vacation days last year. … “Tons of people feel they don’t have the discretionary spending to take vacation, so they just stay at work.” That’s a very bad idea, experts say. “The research is clear that failing to take a vacation creates higher levels of stress and greater levels of disengagement at work,” Matthews reports.

“It’s silly to think that giving up vacation is going to make your colleagues think how important you are,” says … a career services expert. … “Take your vacation and let them miss you.” After all, you can never get back those days you didn’t use–or the once-in-a-lifetime memories they might have produced. “Vacations are underrated,” agrees Joan Kane, a Manhattan psychologist who has worked as a therapist for 22 years. … They satisfy a deep need to feel that you’re in control of your own time. “On vacation you have no boss to satisfy.” (more)

Oddly, most who comment on unused vacation time both note that there exist signaling incentives to work more than required, and tell people that taking vacation time would be good for them, as if they were ignorant of such advantages. This seems a common idealistic message – exhorting people to do what they would if there were no signaling incentives. If the point were to give people useful info this would be pointless, but if the point is to reaffirm shared sacred values, it works fine.

While many commenters lament the presumed inefficiency of this signaling equilibrium, it is worth noting that employees often also inefficiently go out of their way to signal defiance of employers. Most employers are reluctant to cut wages in a downturn, to give employees frequent direct negative feedback, or to require them to wear uniforms, sing corporate songs, etc., all because employers know that employees would respond badly with signals of defiance. These signaling equilbria can be just as inefficient as taking too little vacation, but few commenters lament these distortions. Because the sacred shared values we want to affirm are more about defying firm authorities, rather than submitting to them.

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  • CaptBackslap

    But are the perceived signaling advantages of not taking a vacation actually there?  Employers may also be aware that non-vacationing employees are overall less productive (as shown by companies that require vacation days be used), and HR departments might actually be rolling their eyes at the grizzled employee who hasn’t taken a vacation in forty years.

    Also, signaling is not the only reason employees underuse vacation days. Some (all?) companies pay outgoing employees for unused vacation time, and it’s never a bad idea to keep a few in the bank in case something comes up.

    • The Watchmaker

      In my experience, signaling dedication is just as important (if not more important) than signaling productivity.

  • Doug

    Many times the constraint on vacation days isn’t the arbitrary number set by HR. It’s the ability to juggle the continuos responsibility of the job to get an open slot of time. This is especially true for high level workers.

    Does the typical CEO really feel like it’s his allocated vacation days that keep him from not taking off more days? If he wanted to take a two week vacation and had no vacation days left in payroll would HR peons stop him? 

    When I last worked at a large firm and took a vacation I never even put the days in the HR payroll system, I just informed my manager, co-researchers and execution trader when I’d be out.

  • komponisto

    The average American worker gets 14 vacation days a year
    ?? That’s around 25 work days for every vacation day. How do people stand this?

    • Dean Jens

       I calculate about 17.  The average American gets weekends and holidays.

      • Mark M

        Yes – about 17 work days per vacation day.

        BUT – about 1 day off for every 1.7 days worked.

        I used: 
        366 days this year
        251 week days this year
        8 holidays (at my employer)
        12 vacation days (per this article)
        251 – 8 – 12 = 231 work days
        366 – 231 = 135 days off

        231 / 135 = 1.711 work days per 1 day off.  Not too shabby.

    • Someone from the other side

       I get 25 and still find it hard to stand (in fact, I negotiated an option for another 20 days of unpaid into my contract :). OTOH, I find it hard to take actually take the vacations

  • Mark M

    I’m not sure how many employees “submit” to the “authority” of their employer.  I would guess that it’s a lot.  I’ve been fortunate enough to always consider my employment a mutually beneficial agreement between me and my employer.  (Just like it says in the new hire paperwork!)  I do not submit to their authority – I agree to work in return for my wage.  I do not consider them to be my masters.

    There may be little practical difference in terms of the need to follow the rules, but my attitude towards my work and my employer means I have no desire to signal rebellion.  I’ve been successful with instilling the same attitude in my employees.

    I also take all my vacation, and tell my employees that if they don’t schedule vacation time off that I’ll schedule it for them rather than let them lose it.  To date, I’ve never had to do that.

    I may be an exception, but I think it’s important to note that the article discusses some pretty sweeping generalities, does not apply to everyone, and there are solutions to the problem of unused vacation time.  (Your mileage on any given solution will vary depending on corporate culture, management, your position, your peers, etc.)

  • Dean Jens

    Maybe this advice is self-interested; if you don’t take your vacation days, that improves the signalling equilibrium in my favor.

  • Douglas Knight

    Not one of those quotes endorses a signaling reason to skip vacation days. Only the last even mentions that people believe in such a reason, but it disagrees.

    • TheWatchmaker

      From the first quote: “It’s not exactly fair but it’s human nature, if I’m concerned about getting fired then the last thing I’m going to do is take a vacation day.”

      • Douglas Knight

        Yeah, but the preceding sentence (falsely) claims that skipping vacation increases productivity. 

        The sentence after the excerpt could be interpreted as it being about signaling, though.

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  • I don’t take all my vacation days because I want to keep some “in reserve”. I want the flexibility of taking a week or two off on short notice rather than having to plan my usage far in advance. Of course that means I’ll never use all of them since once I leave my job they will disappear (in the form of more money, but still).

    • fcircle

       I don’t understand why one would expect the end-of-year balance to be zero.  Wouldn’t you expect it to be somewhere between 0 and the maximum you are allowed to accrue?

      Particularly since most jobs pay you for unused vacation balances when you leave…

  • S

    In my country if you do not take your vacation days then the employer must pay you for the number of days that you are still owed when you leave the employer. Thus untaken vacation is considered a debt that the company owes.
    Many of the employees, including myself, have accumulated quite a few days of leave over the years and so now my employer is demanding that we take extra days each year to reduce this liability they have. They even have a formal policy that vacation planning must be discussed during our annual reviews.

  • Brazzy

    So how do signalling incentives explain the fact that taking all your vacation days is the absolute norm in other countries?

    • Jayson Virissimo

      Part of the explanation might be that the oppurtunity cost of taking a vacation day is less for Americans than most others, because they make more money and like their jobs more.

      • Jayson Virissimo

         Whoops, by “less” I meant “more”.

  • I thought that most research actually showed that vacations are stressful and do not make you happier.

    • zzk

      what do you mean by vacation? International travel is certainly stressful, but thats a far cry from sitting at home, watching movies, playing, enjoying family and getting caught up housework, etc.

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