There is plenty of science-backed evidence that a little rest and relaxation boost productivity. But paid vacation days by country still vary widely—ranging from zero to more than a month.
As a multinational employer, it can be tricky to find a balance that meets statutory requirements while remaining fair to your global workforce.
In both the U.K. and Australia, for example, employers are required to provide statutory paid vacation time and pay their employees for certain public holidays. Their cultural attitude towards time off is casual and relaxed.
This can be a challenging adjustment for U.S.-based companies where there is no statutory time off and employees often feel societal pressure to skip their vacation allotments.
So, should you pay your employees for taking time off work? In many countries, you don’t have as much flexibility on this decision due to local mandates.
Statutory leave vs. discretionary paid vacation days by country
First, it’s important to understand the differences between annual leave requirements and discretionary employer benefits.
What is statutory annual leave?
Some countries mandate annual leave for full-time employees. This means that the employer is required to provide leave and may be required to compensate employees during their time off.
In Brazil, for example, employees are entitled to 30 days annually after one year of service with good attendance. Missing more than five days per calendar year outside of other approved leaves will reduce the leave entitlement for an employee.
In Germany, the Federal Holidays Act provides 24 days of statutory leave for all employees. However, most employees get closer to 30 days, including discretionary paid vacation days offered by their employer.
At the end of the day, though, France comes out as one of the top countries with 36 total days of statutory paid leave per year. The European Union fares well in general when it comes to mandated paid holiday.
A sampling of paid vacation days by country around the world
What are discretionary vacation days?
In addition to or in the absence of a federal mandate, employers often choose to provide paid vacation time to their employees as a benefit. This is considered discretionary paid vacation, and many employers offer a combination of paid and unpaid time off.
As a global employer, it’s important to balance local needs with global policies that ensure all employees are treated similarly.
Let’s say you have offices in the U.S. (where two weeks of paid vacation is customary but discretionary) and offices in the U.K. (where employees are entitled to much more time off). You can balance the scales with flex-time or PTO policies that provide different ways for your U.S. workers to access benefits similar to your U.K. workers.
What is a paid time off (PTO) policy?
A paid time off (PTO) policy practice emerged as a way to compensate part-time or hourly workers with time off. The details vary by employer, but the general idea is that employees earn paid time off at a set rate for every hour worked.
Some employers have actually adopted similar structures for full-time employees, too. In these cases, PTO often serves as a bucket of all the different types of time off (sick days, vacation leave, personal time, etc.), which simplifies human resource tracking.
In the U.K., unlimited PTO policies are becoming an increasingly popular way to attract talent. Employees can earn this time off in addition to statutory annual leave and holidays. In the U.S., these policies are steadily replacing traditional benefits programs that designate days off for different purposes.
Why paid vacation is good for your bottom line
While making a productive contribution to society is tied to our sense of self-pride, too much of a good thing leads to burnout. Up to 76% of employees struggle with burnout, resulting in depression, lower productivity and higher turnover.
But when employees get more time off, they can engage with hobbies, be more physically active and spend more time building social relationships that recharge them. Striking a good balance between these personal needs and productive time at the office is the best way to prevent burnout and promote steady productivity that doesn’t dip with the mood in the office.
It’s hard to define the exact number of days off that increases employee motivation before you hit a point of diminishing returns. Cultural and individual factors heavily influence the data.
However, even as little as one week off per year can increase motivation. One survey found that 70% of employees who took at least one week off were engaged at work. Only 55% of those who chose to forego their time off shared their sentiments.
The bottom line on vacation policies
Time off can be mutually beneficial for employees and employers. Rather than looking at mandatory annual leaves as a burden, multinational employers should embrace paid vacation days as a way to supercharge their workforce.
Stay on the right side of legal and cultural precedents by addressing statutory leave requirements first. Then, add flexibility with the discretionary time that creates a fair and cohesive policy for your global workforce.
Your annual leave policy is just one piece of your global HR puzzle. Don’t miss this guide: How a multicultural HR strategy can unite a global team.