Nearly Half of Employees Expect to Leave Vacation Time Unused: What Should HR Do?

Paid time off (PTO) is one of the most desired employee benefits, but new data reveals yet another troubling trend about the ever-popular perk—that roughly half of workers plan to leave vacation time on the table by year-end.

That’s according to a survey of 1,387 U.S. workers by Eagle Hill Consulting, which found that 48% of U.S. workers say they do not expect to take all of their allotted vacation days by the end of the calendar year. Meanwhile, more than one-third (36%) say they have not taken a vacation in the past 12 months.

The survey found that the top impediments to taking time off include the expense of taking vacation (44%), self-imposed pressures (28%), heavy workloads (24%), no PTO (24%), no colleagues available to cover work (21%), pressure from managers (14%), and organizational culture (12%).

Not using allotted time off is a troubling trend as the holiday season is often a stressful time for employees, on top of the burnout and other issues workers are already facing, said Melissa Jezior, president and CEO at Eagle Hill Consulting. Previous data from Eagle Hill found that 45% of the U.S. workforce reports burnout. Younger workers report the highest levels of burnout, with Generation Z at 54% and Millennials at 52%. Women (49%) also report higher levels of burnout than men (41%).

“Establishing a culture that fosters taking time away to recharge can be highly beneficial to employers in terms of lowering burnout level, improving employee engagement, and fostering employee wellness,” Jezior said.

Sandra Moran, chief customer experience officer at software firm WorkForce Software in Detroit, agreed that employees not using their PTO can be problematic—not only for employees, but also for organizations.

“Employers should recognize that a culture where workers don’t take PTO can mean there is a lack of understanding of the value of time off to employee health, happiness, retention, and productivity,” she said.

Additionally, there is an increased financial burden on the company for unused vacation accruals, she said, adding that, in July 2024, the benefits platform PTO Exchange found that the estimated liability for unused PTO in the United States is over $1 trillion annually. That’s roughly $7,600 per full-time worker. 

The Eagle Hill Consulting data didn’t specify how much PTO workers leave on the table, but the 2024 SHRM Employee Benefits Survey found that employers, on average, offer 12 paid vacation leave days, 10 paid sick leave days, and 20 PTO days (which include both vacation and sick time) for a full-time employee who has been at a company for one year. Meanwhile, about 7% of employers offer a paid open or unlimited leave policy.

When employees have PTO left on the table at the end of the year, it can signal a couple of things, Moran said. Mainly, it can “indicate that employers aren’t adequately communicating and reinforcing their vacation policies to employees and managers, or that employees are purposely refraining from taking PTO due to fear of work piling up, impact to career progression, burden to team members, or not recognizing the need or value of time away to their overall health and productivity,” she said.

Other PTO Trends

The Eagle Hill Consulting survey comes on the heels of other research indicating problematic patterns for PTO—from unused time off to employees increasingly working while on vacation.

While SHRM research finds that paid-leave benefits are tied with retirement benefits as the second most important benefits type—with 81% of HR leaders saying those benefits are “very important” or “extremely important,” behind only health care benefits in importance—employees often don’t take time off, and others who do take time off work aren’t getting the full benefits of the time away.

A Harris Poll from April found that 3 in 4 U.S. workers had not used the maximum amount of PTO allowed by their employers. And even when employees did take time off, 60% said they struggled to fully disconnect from work, 86% said they checked emails from their boss, and 56% took work-related calls during their time off, according to the Harris Poll. Nearly half said they felt guilty about taking time off in the first place.

And a recent survey from retirement plan provider Empower found that employees overwhelmingly value their PTO and say it’s beneficial for their mental health—but at the same time, many report being worried about work even while on vacation. Half of employees say they check emails on vacation, and 35% say they get anxious when requesting PTO days for vacation, according to Empower.

Employer Action

Employers can take steps to alleviate the PTO problems.

One approach leaders can take is to proactively encourage employees to take time off—or at least take time to decompress—and set an example by taking time away from work themselves, Jezior said. “Of course, taking time off in the coming weeks isn’t possible in some jobs like retail and public safety, but employers can encourage breaks before or after the holidays or offer flexible work schedules,” she said.

HR and company leaders can also better communicate PTO policies and best practices—including letting employees know to take time off in advance. This way, employees don’t lose days if there’s a year-end deadline, and the employer can ensure that too many employees’ leaves are not overlapping and leaving the organization short-staffed.

“[Employees] must stay informed of their PTO policies—some companies have blackout dates or a minimum notice period for requests—in order to make sure they are off work when they want or need to be, especially if it’s within their allotted number of days,” Moran explained. They should also check if days roll over to the next year, or if they will be lost on Jan. 1.

Employers may want to consider sending reminders each quarter about using vacation time, what the blackout dates are, and how much notice must be given, she added. “This will help encourage workers to take advantage of their earned time, rather than wasting the benefit or failing to use the benefit for what it is intended to do—provide adequate time away from work to create a healthy work/life balance for employees.”

Moran also suggested employers analyze and share data illuminating any correlation between employee PTO trends and negative business outcomes, such as increased turnover, reduced productivity, or higher absenteeism.

“To change those trends to improve utilization, leverage data to identify specific actions the company can implement to drive change,” she said. “Are there actual workplace cultural or business requirements impacting employee PTO? For example, are employees who don’t use vacation days the ones who are promoted more regularly than those who do not? Are there seasonal or workload peaks prohibiting employees from taking time off that can be addressed with improved scheduling?”