Having a vacation policy might feel like unnecessary burden – what’s wrong with playing it by ear? – but getting this particular bit of HR policy in writing is important. Paid time off plays a key role in stress management for most workers, which, when set up properly, can lead to higher productivity and decreased turnover. And while paid time off isn’t legally mandated in the United States, 75% of businesses have some form of vacation policy in place anyways.
It’s a well known fact that the United States lags behind the rest of the world when it comes to paid time off policies, and the studies that show the benefits are nothing short of comprehensive, but what we’re going to look at here are the specifics. How early should employees put in their requests? How do you handle productivity and deadlines? How do you resolve schedule conflicts? We’ll answer those questions, and more.
Scheduling is an Art
Service businesses are often at the mercy of the season, which can lead to conflicts when employees want time off during the busy season. Once you add in day-to-day variability, which can result in employees being called in on normal days, it’s easy to take a pessimistic view of time off requests.
Your ability to handle time-off requests is tied directly to your scheduling. If you have a consistent system to figure out who’s on shift two or three weeks out, and an on-call schedule that employees rotate through, timing time-off requests is easy. Build a policy that requires employees to submit time off requests 1-2 pay periods before the time in question, with the option to swap shifts with someone else (with prior approval) for requests with less lead time.
It’s a good idea to post the tentative schedule where employees can see, so they can anticipate when they’ll be on shift. The less warning you give them, the less warning they’ll give you.
The Productivity Question
Less people working equals less work being done, right? That depends on what they’re doing. Small businesses tend to run on lean margins, and paying workers to not be there can definitely hurt, but if you can’t operate with one or two workers out of commission you have bigger issues than your vacation policy.
If you handle your scheduling correctly, maintaining productivity shouldn’t be an issue under normal working conditions; asking your employees to request their time off 1-2 pay periods in advance let’s you work around potential issues. Having an on-call policy that designates one or two employees as the first-string responders for unforeseen issues alleviates the issues of workforce scaling when people are sick or injured. A reasonable time-off policy should maintain productivity, not reduce it.
The problems arise, of course, when the employees who request time off have specialized skills or play unique roles in your business. It’s easy to build a schedule when everyone is equal; accounting for different skill levels is significantly harder. When it comes to less replaceable employees, consider working with a sub-contractor. You may need to negotiate slightly different lead times for vacation requests from uniquely-skilled employees, but it’s important to pair those increased requirements with increased benefits of some time; making life harder for high-value employees is an easy way to end up in a bad spot when they leave.
No matter how productive your workforce is, of course, there’s a limit to how many people can take time off at once. The exact number is different for every business; make sure you know yours. If your workers know the limits ahead of time, they’ll be more likely to figure things out ahead of time.
Perfect schedules only exist in a perfect world; you will encounter scheduling issues, and they’ll be worse around holidays and popular vacation times. Having a consistent system in place for mitigating the damages that can arise from scheduling issues will do a lot to keep your business on track.
Throughout this article we’ve made consistent reference to having an on-call system; a written plan where, each week, one-to-two employees are designated as the “first string” responders. They’ll be the ones who are called in first if there’s a scheduling issue, an unexpected increase in available work, or some kind of emergency. A system like this distributes the burden of unexpected work evenly throughout the workforce, making your workforce more reliable when things go funny.
You can’t predict the unpredictable. Which is why being able to predict your responses to the unpredictable is invaluable. If your employees don’t know when or why they’ll be called in, or in what situations they can take time off, they’ll be more likely to weasel their way out of work instead of talking to you about it directly.
Debunking The Unlimited Vacation Fad
Before we go any further, it’s important to talk about a recent trend that’s been popular among startups and tech businesses: unlimited vacation. It sounds like a great idea on the surface, but it creates the same issues that come from having no vacation policy; namely inconsistent enforcement, unclear guidelines, decreased employee satisfaction, increased turnover, and generally bad performance. Unlimited vacation sounds nice, but it isn’t effective. Skip it.
Meeting The Legal Requirements
In some countries, this would be the largest part of the article. In America, it’s the smallest. Legally speaking, there are no federal requirements for paid time off. Some states have their own laws for sick leave and other forms of paid time off, but they are less than strict.
You are, however, obligated to uphold the terms of the employment contract your employees sign. Not every job requires a formal employment contract, and, once again, the exact requirements vary depending on the state. Contracts exist to protect both the business and the employee, but they make it harder to change your policies when they are no longer applicable or productive.
Ultimately, time off policies are common sense backed by thorough paperwork. As long as you’re consistent, proactive, and willing to communicate with your employees, building an intelligent time-off system is simple. Get your schedules down early, create an on-call system, plan for conflicts in advance, and respect the people who work for you.