Create a fair small business vacation policy

Summertime—high season for sunburns, cookouts and vacations—can mean high anxiety for managers. Nearly every employee wants to take a good chunk of time off, but most businesses can’t allow customer service or any other core function to lapse just because it’s beach weather. The following tips will help you design a fair and useful small business vacation policy that will keep the trains running through summer—without alienating the rank-and-file.

Codify your vacation policy

Even if business in your industry slows in summer or you offer unlimited PTO, it’s wise to maintain a formal vacation policy. Be sure to put it in writing and then distribute it to all employees annually and whenever a substantial change is made. “Structure is important,” says Nancy Saperstone, senior HR business partner at Insight Performance, a human resources consulting firm. “Fair vacation policies are not loosey-goosey.”

Don’t be arbitrary

Make sure that vacation requests are granted or denied judiciously. “Managers reviewing time-off requests must be consistent to avoid the perception of favoritism,” says Jennifer Gunter, secretary of the HR Florida State Council. At small companies in particular, it’s important that all employees’ vacation requests are solicited before any summer time off is granted.

Be transparent

If you want to keep your employees, don’t offend them by handling their vacation requests with a “because I said so” attitude. “Transparency is key,” says Saperstone. “You have to let people know how you’re making these decisions so they understand and respect how it’s done.” David Galic, a spokesperson with employee-scheduling software vendor, gets to the heart of the matter of a well-managed vacation policy: “Managers should give reasons for declining vacation requests.”

Enumerate the criteria for reviewing vacation requests

Employees will be more likely to make workable vacation requests if they understand the deciding factors in your vacation policies. “You don’t want to only reward senior employees,” says Saperstone. You might, for example, prioritize requests that come in early, or reward high performers with the first choice of vacation dates, or set up a regular rotation to determine whose requests will be considered first.

Encourage communication among team members

“We have an HRIS system where employees can make vacation requests, and also a shared calendar,” says Loni Freeman, vice president of human resources at public relations firm SSPR. “We ask employees to communicate with their account team to ensure client coverage.”

Make flexibility a two-way street

If you give employees some flexibility in the workplace, you’re in a position to ask them for flexibility of their vacation arrangements. “We have core hours, but otherwise employees can decide at what time they arrive at the office and leave,” says Freeman. “Because we allow daily flexibility, employees may be willing to take a 15- or 20-minute client call on a PTO day,” says Freeman. But take care to strictly define responsibilities that carry into vacation time and to limit work during vacations to the absolute minimum.

Consider ‘summer Fridays’ to build goodwill and cooperation

As of 2017, some 42 percent of employers chose to give employees Friday afternoons off, according to a CEB survey. Given that many employees’ minds will already be at the beach after lunch on TGIF day, formalizing this bonus time off may cost little in productivity while keeping employees engaged all summer—and help generate cooperation to manage everyone’s PTO requests.

Be upfront with your vacation blackout policy

Unless your business depends on seasonal hires, a vacation policy with blackout periods is likely to sow employee discontent. What do you do if an employee has a family wedding during the blackout? You could create an exception, but that might breed additional resentment among other employees. If you must ban time off at certain times of the year, “it’s really important to let employees know during their onboarding that the company sometimes needs to have a blackout period for vacations,” says Galic.

Offer rewards for those who work on sought-after days off

As a part of your small business vacation policy, consider giving employees special consideration if they agree to work certain days that most people want to take off. This can be especially important at small businesses, where co-workers are familiar with the comings and goings of people, which can easily develop into time-off envy. “You can pay time-and-a-half for certain days,” such as July 3rd this year, which falls in the middle of what many employees will see as a four-day weekend, says Saperstone. “Or give them an extra day off; think creatively.”

Consider summer stay bonuses for high-turnover hourly jobs

Small businesses that depend on hourly workers could suffer from high turnover. It’s wise to offer bonuses to workers who stay with the company through the summer and take time off only when it has been requested and granted well in advance.

Cross-train in anticipation of heavy PTO periods

Cross-training, which goes hand-in-hand with professional development, can be a tremendous boost to your vacation policy. “Cross-training is particularly important with our largest clients, where there are two or three people on the team who know as much about a given client as the lead person does,” says Freeman. Cross-training is also critical at small companies where many tasks are often carried out by just one employee.

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