BY MOLLY JOHNSON-JONES for FORTUNE
When I tell fellow business leaders from the U.S. about our U.K.-based startup’s PTO policy, they often marvel at its “generosity.” They struggle to comprehend how I can justify shutting down the company for a full week. Eyebrows are raised further when I explain that we do this not once, but twice every year, and that employees use none of their 35 days of vacation in order to accommodate our Christmas and summer company-wide shutdowns.
I’m well aware that many would deem our approach unproductive or assume that it is bad for business. My company’s vacation allowance differs dramatically from the U.S. norm, where the average worker gets just 11 days of paid time off a year. But when you compare the U.S. approach to PTO policies and outcomes across Europe, it becomes clear that the American way is not the only way. Nor is it necessarily the best.
European recipes for success
European workers are entitled to around 20-25 days of vacation each year. In the U.K., statutory annual leave entitlement (paid time off which can include public holidays) rises to 28 days. By contrast, U.S. workers have no legal paid vacation entitlement at all. This disparity is due to a culture of presenteeism, which sees output measured against the total number of hours staff work, and vacations being seen as disruptive or a “perk.” So it’s unsurprising that a third of U.S. workers feel unable to take time off. And it follows that one in four Americans rarely or never take their full PTO allowance.
Yet, you need only look at productivity levels across Europe and the U.S. to see the “hours equals output” myth fall apart. A recent ranking of the most productive OECD countries puts the U.S. in 12th place. All of the 11 countries that rank higher–including Norway, Luxembourg, Ireland, and Germany–offer workers significantly more vacation days than U.S. businesses.
Essentially, European employees tend to work far fewer hours than American employees–and tend to be far more productive for it. Why? Only teams who are physically and mentally well are able to work at their best–and it’s clear that giving staff sufficient time off to rest and recharge improves employee well-being and performance.
In Sweden, where all employees are entitled to 25 days of annual leave per year, employee well-being rates are significantly higher than in the U.S., according to a recent McKinsey report. Research also shows that taking time off can reduce rates of stress and absenteeism. British companies whose teams have moved to four-day working weeks (which give staff a paid day off each week, in addition to weekends and their usual leave allowance) report reduced burnout and increased revenues at the same time.
Sufficient PTO allowances can’t possibly be seen as “generous” (as my U.S. peers suggested) when businesses have so much to gain from healthy, thriving teams, and so much to lose through the alternative.
The surprising benefits of company-wide shutdowns
Over three-quarters of U.S. workers have reported experiencing burnout, and U.S. employees are also amongst the most stressed in the world, according to Gallup’s recent report. Bosses say they want to tackle this–but true change will take more than increased vacation time. Staff must first and foremost be empowered to maintain a healthy work-life balance every day, not only on vacations. Giving employees the option to work from home and offering flexible start and finish times can help hugely, as can many other kinds of flexible working benefits.
Employees must also feel empowered to use their PTO allowance in full and be able to fully switch off when they’re away. This should be encouraged by the role modeling of senior leaders. Company shutdowns, which are baked into the cultures of countries like Norway and France, can help with all of this.
Company shutdowns ensure that even employees who usually find it difficult to step away from their laptops take a good break, rather than just the odd day off. They can more easily switch off when they know that their colleagues aren’t still working in the background, sending Slack messages and emails that they’ll have to catch up on when they return. Additionally, promoting company-wide breaks helps empower employees to take more time off more regularly, knowing that value is placed on their performance, not the number of hours that they work.
The entire company coming to a standstill doesn’t impact business in the way you might think. Take Norway as an example. The majority of Norwegians take time off work in June and July, during the 4 weeks of “fellesferie,” and the country still outranks U.S. productivity levels. Norwegians are also consistently ranked amongst the happiest people in the world.
This isn’t to say that every business can or should introduce 35-day PTO policies or company-wide shutdowns. Every company is different. For some businesses, like mine, company shutdowns are part of what enables us to work well and stay healthy. Flexible working benefits are another huge part of this. They can supplement PTO policies at companies that can’t offer bi-annual shutdowns to create happy, healthy, and thriving teams all the same.
Vacations aren’t a silver bullet to fix mental health crises. But it’s clear that attitudes towards PTO and preconceptions around productivity need to change when staff feel unable to take time off and are burning out as a result. European approaches might just offer some inspiration–if business leaders also allow themselves some time to pause for thought this year. I’d highly recommend it.