Anyone ever just feel like the working world is full of “No”? It is so often I meet people whom; upon learning I am an HR professional, want to ask if “Their boss doing x, y, or, z is moral, ethical, ok, or otherwise acceptable”. More often than not the answer is “it depends” but discussion recently bothered me maybe more than it should have.
I was talking with an acquaintance of mine and we were discussing the holiday season and since I am a huge proponent of vacations, the concept of taking time off naturally came up. This particular individual happens to be going through their busiest time at work right now (December) so when the idea of allowing employees to take time off was brought up, they were a stone wall. Just a solid “No”. No if’s and’s or buts about it, no time will be given off for the people he/she manages. They mentioned they had an employee who asked for 8 weeks off during this period and when they said it, looked at me like it was the most ridiculous thing they had ever heard. “The business needs these people”, “What am I supposed to do if my whole staff leaves me when we are the busiest?” and “8 weeks?! That’s insane, it will cost me money I don’t have in the budget just to allow it!” he/she said, and to some extent, they are valid objections.
So often I hear people turn down requests out of hand for who knows what reason. As an observer the turned town person typically expresses a range of feelings from sadness to anger but usually deflation. For me, I always thought this type of stand alone “no” logic was faulty. There may very well be a good reason not to allow someone to take vacation during peak times of the year, but to not consider the specific merits of the request, I find careless.
Suppose for a moment you are a manager at your favorite retail store and you are open right now excitedly maneuvering through your peak sales. One of your team members asks for, those same 8 weeks off. Like my friend above, most people’s knee jerk reaction will be to simply tell the employee “no” toss in a few colorful words for character, because hey, it’s the holidays, and go on about their day.
Now, the employee is left in a predicament. Do they resign and go do whatever it is they were planning to do? Do they cancel the plans and stay to work? Do they go anyway and force you to use your own company’s policies to terminate them for not being at work? None of these options are particularly good for either the employee, or the company.
Maybe we argue that the company can just hire a new person and that is the better decision. Many managers argue that it saves costs to just cut ties and hire anew. Interestingly, that does not always seem to be the case.
Letts assume that this employee has 2 weeks of vacation they can use to cover part of the time they are requesting. This leaves 6 weeks of unpaid time off. According to Glassdoor.com, the average salary for a Retail Sales Associate in the United States is $36,147 annually. So, if this person were to allowed to take the 8 weeks off, the two weeks that would be paid would cost the organization $1,390.27 in base salary.
That’s not all the employer would have to pay for an 8-week vacation though. We should also assume this employee has health insurance. According to the U.S. Department of Human Services, the employer’s portion of health insurance in the United States per year per employee is $4,776. Unlike the salary, for insurance, the employer must pay the employer portion of the premium for the full 8 weeks. This figure comes out to an average of $734.76.
Lets not forget about Uncle Sam’s portion. Employers must also pay certain taxes on the wages themselves. Social Security and Medicare account for 1.45% of the employee’s wages. Additionally, unemployment Insurance can range anywhere from $.75 to $2.74 per $100 of payroll. These figures come out to $20.15 and $38.23 respectively.
Lastly, we must calculate for lost productivity. For the purposes of this example, we will use the value of our retail associate for the full 8 weeks to a tone of $5,561.07.
When all is said and done, it costs an employer, on average, $7,760.66 to allow a retail associate to take an 8-week vacation.
Now, if instead of building morale, employee engagement, brand reputation, employee loyalty and allowing this individual the opportunity to take their 8-week vacation, the organization decides it is best to separate from the individual and hire a new Retail Sales Associate, there are both opportunities and real costs associated with that decision as well. John Dooney, the Manager of Strategic Research for the Society for Human Resource Management indicates the average cost of loosing an employee is about 38% of the separating employee’s salary. Included in this figure are internal separation processing costs, replacement hiring costs, training of new hire costs, and lost business and productivity costs.
Keeping in line with our Retail Sales Associate, this figure comes out to roughly $13,735 for a trained replacement hire based on Mr. Dooney’s estimation. Other organizations come to similar figures. For example, consulting firm SynergisHR, suggests the figure is somewhere around 21% of the annual salary not including benefits for a trained hire, putting the total around $7,590.
Even if we assume neither of these predictions is exactly accurate and the real total lies somewhere in the middle, it is easy to see that it costs more money to separate the Retail Associate and hire a replacement than it does to allow them to take the vacation. Additionally this calculation does not include any residual productivity gained from an increasingly positive culture based on a rested and more engaged workforce.
So, the next time an employee comes to you and asks for something that may make you want to simply say “no”, take the time to sit down and decide what really is in the best interest of your organization. Sometimes the answer will still be no, but the point is to consider the totality of the circumstances before making that knee jerk reactive decision. Build your people, invest in them, and realize they are human beings who from time to time need to get away fro their seemingly negative boss.