I am pleased to host this guest post by Christopher Skehan on the importance of vacations—even as compared to other business concerns (obviously related to Dan Miller’s case for the importance of sleep). It is the fourth guest post this semester from students in my Monetary and Financial Theory class. You can see links to all of the other student guest posts here. Here is Chris:
It’s no secret that everybody loves time off from work to go on vacation. It seems pretty simple that people should work to live, and therefore use all of their vacation time. Yet, American business culture produces employees imagining industriousness that includes first-in and last-out workers, all nighters, and long work sessions for consecutive weeks. For many there is no room for vacation in this industrious image. “More than forty percent of American workers who received paid time off did not take all of their allotted time last year, according to “An Assessment of Paid Time Off in the U.S.” commissioned by the U.S. Travel Association, a trade group, and completed by Oxford Economics” (Forbes). The U.S., one of the few developed countries that doesn’t require companies to provide vacation time, needs to change because taking a vacation is good for production and in some cases can even prevent crime.
This productivity science seems like a justification for laziness in the workplace. However, several scientific observations have proved that taking small breaks during long study sessions not only dramatically improves your productivity but also your mental ability. The theory is simple, the brain is a muscle, and every muscle tires from repeated stress. “In the mid-1920s, an executive in Michigan studying the productivity of his factory workers realized that his employees’ efficiency was plummeting when they worked too many hours in a day or too many days in a week” (The Atlantic). So if this is true on a micro level then it must be true on a macro level.
So far it is clear that taking breaks and by extension vacation are essential for employees, but does it hurt the employer? Quite the contrary, it has several advantageous for employers according to Forbes. First, when one employee leaves it forces an additional employee to learn the functions of a new job. This system creates an unintentional education system, and prevents the risk of crisis when a key employee is lost. Secondly, it cuts cost through reductions in health insurance payments. “The American Psychological Association has documented several potentially stress-induced health threats, such as increased cardiovascular risks and aggravation of existing conditions” (WSJ). Reducing health issues from your employees in not only the moral thing to do, but can now be justified in your balance sheets as well. Thirdly, mandatory vacation prevents fraud and embezzlement. “In 2007, Jérôme Kerviel, a trader at Société Générale, lost over $7 billion of the bank’s money. He later admitted hadn’t take one single day of vacation that year because he did not want anyone else to look at his books” (Forbes). For situations like this the FDIC has mandatory two-week vacation for certain industries.
The FDIC has the right idea but it needs to be implemented to every industry. During my time in Italy this last summer everything closed from one to three in the afternoon for people to go home and eat lunch with their family. When I explained to my host family that Americans didn’t do this they thought it was insane and called us robots. Now I think they are right, and think it is essential to implement mandatory vacation time for all employees. It reduces the cost of health insurance, increases productivity, produces a more trained workforce, and stops fraud.