Changing the ‘psychological contract’

Despite this endorsement at worker level, experts warn mandatory vacation time isn’t a complete solution – because its ultimate success still depends on building the kind of company culture that allows workers to take time off.

“If you have a boss that you know will hold it against you if take leave, even if you have, say, 18 days of mandatory time allowed, you won’t be able to take it off,” points out Anat Lechner, a clinical associate professor of management and organizations at NYU Stern School of Business.

This raises the question of how effective mandatory leave policies can be if there are no mechanisms for enforcing them in some organisations. Lechner points out that employees generally aren’t the ones standing in the way of their own vacations, suggesting enforcement measures at them miss the point. But she acknowledges that without some kind of enforcement, the kind of change that companies want to achieve may not occur. One option, she suggests, could be to incentivise workers to take holiday and penalize their managers if they don’t, saying: “If the incentive goes to the employee and the punishment goes to the manager, perhaps we’ll begin to see something happen.”

More broadly, however, she believes creating an environment that favors taking time off is more meaningful than enforcing mandatory vacation policies through penalties and incentives. Workplaces need to have “a culture that is appreciative of people’s need to take time off, and is flexible and logistically smart, so that when people are off, work can still continue, and they can be brought up to speed quickly when they’re back”, she says.

Horton agrees, saying the success of policies depends on how committed an organization is to tackling overwork and unhealthy vacation culture. If firms truly want employees to rest, they need to allow them consecutive days off – for example, Goldman Sachs requires employees to take one set of five consecutive days off each year – and also need to ensure staff don’t work while they’re on vacation. They will “respect that time off and appreciate that this person is on leave and cannot be contacted”, she says. “The organisation, at the highest levels, has got to fully subscribe to [the policy].”

As companies work towards creating the kinder working cultures that employees are, Lechner believes that – regardless of how effective mandatory vacation policies prove to be – the fact that they are being trialled seeking progress.

“Whether or not we will succeed with this iteration of mandatory vacation days… we will see. If we don’t succeed, we will learn what the problems are and how to solve them,” she says. In a year or two, she believes, businesses will be better able to assess challenges around mandatory vacation – like what kinds of roles or tasks fit best with the model, or whether certain times in the business cycle lend themselves better to people taking holiday.

Yet overall, she believes, moves to help workers take more leave are part of an attempt “to change the psychological contract ever so slightly and create workplaces that are more humane for people. And this triggers the mandatory vacation conversation. This will now create policies that will get deployed, and some will fail royally. But with failure comes learning… We are progressing towards a better understanding.”