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Nov 12, 2014

American employees are taking less vacation time today than at any point in the last four decades.

In fact, in 2013 employees with available Paid Time Off (PTO) took an average of 16 days of vacation, compared to an average of 20 days in 2000.

This is data from a recent report by the U.S Travel Association, conducted by Oxford Economics, which analyzes the impact of forfeited time off. The report’s analysis is based on the Monthly Current Population Survey results reported by the U.S. Bureau of Labor Statistics and a June 2014 survey of 1,303 American workers conducted by GfK Public Affairs and Corporate Communications in conjunction with Oxford Economics.

Why are workers taking less vacation?

It begs the question: Why are Americans increasingly taking less vacation time, and what’s the impact? Let’s explore that … annual-vacation-days1While missing a few paid vacation days in a year may seem insignificant, Oxford Economics’ report puts such choices into a different perspective.

In 2013, Americans used a total of 77 percent of their PTO, and among employees with PTO, an average of five days went unused. With 1.6 of those days being permanently lost, across the workforce, employees ultimately volunteered 169 million days of work.

“Volunteered” sounds even more pleasant that the alternative description  — that these employees worked for free, because 169 days of forfeited work equates to roughly $52.4 billion in lost benefits.

Oxford Economics also points out that taking offered PTO can have significant economic impact. If U.S employees returned to average vacation patterns experienced from 1976-2000 (20.3 days of vacation) annual vacation days taken would increase by 27 percent and would equate to 768 million additional days of vacation.

Even partial-week vacations have leveled out

Using those 768 million days of vacation would result in $284 billion of economic impact (including $118 billion in direct travel spending).

While full-week vacations have declined over the last 35 years, the impact of such a decline has been offset by an increase in the amount of partial-week vacations taken through the mid 1990’s. However, since then, the amount of partial-vacations has steadied out while the amount of full-week vacations taken has continued to decline.decline-of-full-week-vacationsPTO offered to employees in the U.S. is typically between 11-25 days. Just under 60 percent of employees earn between 11-25 days of PTO per year, and nearly 25 percent earn between 11-15 days of PTO annually .pto-taken

Of employees who have PTO, at least 56 percent can bank or rollover unused PTO days for later use. But almost a quarter of employees (23 percent) report losing unused PTO days at the end of the year.

Higher income means more unused PTO

Employees who can bank or rollover PTO are often faced with caps or expiration dates. For example, 29.7 percent report that they can only bank or rollover five (5) days of PTO or less.

Typically, the higher the income earned, the greater the number of PTO days, but higher income earners also report leaving more PTO days unused. Oxford Economics’ report found that on average in 2013, U.S. employees lost more than one-third of their unused PTO and high-income earners lost more than half of unused PTO days.

Based on total annual income and an assumed 260 workdays, the value of a forgone PTO day was estimated by income group, with this result :

estimated-value-of-a-forgone-pto-dayEmployers get over $500 per employee in free work

On average, U.S employees give $504 in paid time off to their employers via free work and, overall, give 1.1 percent of their salary back to their employer each year in the form of free work.

This data provides some serious food for thought, and a valuable perspective towards the implications of unused PTO. However, the most compelling piece of data Oxford Economics report may be this: Employees who give up PTO days do not receive bonuses or raises at any faster rate than those employees who choose to utilize all of their PTO.

In other words, employees who used most of their earned PTO were just as likely to find themselves with a raise or promotion as those who left PTO unused and they reported being significantly less stressed.stressed-at-work-graphThe bottom line is that taking earned PTO is important. Not only can doing so reduce stress and help employees create better work-life integration, but taking earned PTO has broader economic implications and holds significant influence on the perception of the U.S workforce’s culture.

Check in at your organization and make sure the workplace culture is one that encourages employees to take PTO, and, moreover, expects it of them!

This originally appeared on China Gorman’s blog at