Managing Employee Vacation Time Around the Holidays

Predicting and filling the needs for optimal staffing and resources is a challenge for most small businesses at any time of the year. The holidays are especially difficult.

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“It is time when almost every employee wants to spend time with family, travel, celebrate, and more,” says Sherry B. Jordan, who grew up in family businesses, and for the last 20 years has been coaching high performance executives, small business owners, solo entrepreneurs, and professional teams to success.

“They often all want the same day(s) as vacation days, making it a difficult decision for business owners to maintain staff needed for full productivity and still honor the needs of their most valuable asset, their employees,” adds Jordan, who is also the author of Plan it! Do It! Love It!: Be Outrageously Successful Living the Small Business Lifestyle.

While most employers would agree that it is important to give employees time off when it is most important to them, they also agree that optimal staffing is needed to avoid a decline in customer service, missed deadlines, and long wait times, all of which could create long term damage for a small business, says Jordan.

So, what are business owners to do? These two needs are diametrically opposed. A compromise is needed. That typically starts with a few policies and procedures.

Policies and Procedures for Time Off

First, it is important to set policy on the amount of vacation or time off that is due employees. That can range from no time off for new employees or those that are not full time, to a number of weeks for those that have had long service with your business. “How they earn that time off and how many consecutive days they are required or allowed to take should be clearly stated in the Employee Handbook,” says Jordan.

Next there should be a clearly stated time off approval process. This process should include the process for requesting time off, and by whom and how the time off will be approved. For holiday time off, many employers require that the request be made by a deadline earlier in the year so that, with proper planning, as many requests can be accommodated as possible. Often these decisions are made on a seniority basis or simply first requested, first approved.

special policy for holiday time off is not unusual. Some employers ask that employees not take vacation time over major holidays if their business relies on those holidays for a large portion of their revenue such as retail stores, or that they not request more than one major holiday in a single year ( cannot take both additional days off for Thanksgiving and Christmas holidays.)

Often employees find themselves with vacation time that has been earned but not taken in a given year. policy for carrying time over to a new year should be clearly defined and stated in the Employee Handbook. That can range from all time can be taken over to a policy of “no carry over.” Most employers will allow some to be taken over but will set a maximum number of days that can be stored and a policy on how they can be taken in the future. Employees should be encouraged to plan vacation as early in a year as possible.

“It is important to apply these policies fairly and consistently,” says Jordan. “All employees should be treated equally unless there is a seniority clause in the policies.”

Alternative Time-Off Policies

Since it is almost always impossible for all employees to take time off during major holidays, some employers have adopted alternative ways to meet the needs of as many employees as possible.

An office closure that allows all employees and owners to take time off is one way to solve the capacity and resources issues. It is not unusual to see a business closed for a four-day weekend or even a full week over Thanksgiving and an end of the year closure that stretches from Christmas Eve until January 2nd of a New Year.

Outsourced or short-term contract coverage is sometimes a solution to covering the resource needs when employees take time for vacation. These are typically arranged well in advance and only to trained and experienced individuals. Sometimes these individuals cover for employees year after year.
This is not as common but some employers allow employees to find their own substitute. They are given parameters to work within and a deadline to propose the substitute.

As you make these difficult decisions, keep in mind that your employees are a reflection of your company’s mission and values. Clients, current and potential, measure their experience by the treatment they are given when working with them. Research tells us that as high as 70% of clients leave because they were unhappy with the service they received.

“Honoring your employee’s needs to support their life priorities is important,  as is regularly scheduled time away for all of you for a positive employee and owner attitude to enhance good customer service,” says Jordan.

Written by

Matt Krumrie is a career columnist and professional resume writer who has been providing helpful information and resources for job seekers and employers for 15+ years. Learn more about Krumrie via, connect with him on LinkedIn ( and follow him on Twitter via @MattKrumrie.

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