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Small Business Tips: Why Your Employees Must Take Their Vacation TIme Every Year – and How to Make Them

by bogbit

The biggest cost for most businesses is labor – and for small businesses, eking out the additional money to pay for employee benefits like health insurance and vacation time is often a struggle. Many small businesses simply do not offer their employees any paid time off (including sick leave), while the rest are grateful when their employees decide to to forgo their annual vacation – even offering a “perfect attendance” award as an incentive. But it’s important for employees to take time off each year, for their own mental health, and for the health of your company.

Sure, it’s possible that Diane, who has only taken one day off in seven years, loves her job to distraction and can’t bear to be out more than a day – if that. But what if she’s afraid to be out of the office for any real amount of time because then you might realize that rather than depositing the entire day’s sales in your company’s bank account, she’s committing fraud by depositing some of that money into her own checking account? Or perhaps she is falsifying employee time cards, or sales records to give herself a higher commission? Her fraud could be perpetrated, unchecked, for months or even years if you don’t examine her work in the most in depth manner possible – by doing the job yourself, or having another employee do it, costing you thousands of dollars, or more.

Even if there isn’t anything more nefarious afoot, having only one employee who knows critical information, like how to deposit checks, how to record orders or fulfill them, or the contact information for your vendors or customers, makes you vulnerable. What if that employee suddenly takes ill, and has to go on short term disability? What if he gets an offer from another company? As the business owner, you are now at his mercy to run your business, which can lead to costly raises and other inducements for him to stay. If he leaves, then you are left without knowing how to run your own business.

To avoid these, admittedly scary scenarios, it’s important to give your employees time off each year, and implement a “use it or lose it” policy, to give them an incentive to use it each year. This best practice also reduces the possibility of an employee accumulating large amounts of vacation time and then requesting to use it all at once, which can be problematic. Even in a small office, every process, from how sales are made to deposit slips to record keeping should be documented in easy to understand language, so that you can cross-train your employees. Have your employees “job swap” a few times a year so that any holes in the documentation can be filled in before you have to rely on it.

The question you should be asking yourself is not whether you can afford to give your employees vacation time, but whether you can afford not to – and the answer is a resounding, “No!”

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