PTO Decreases Employee Turnover

The US has one of the lowest required vacation days by country in the world, according to HR services company Justworks. No statutory minimum requirement exists for the number of paid vacation days that organizations must offer.

The study found that most US employers give individuals 10–15 days off per year, significantly lower than most European countries. For example, Austria offers the most paid vacation time off each year at 38 days. Other countries that offer at least 30 days of paid time off (PTO) each year include France (36); Spain (36); South Korea (31); and Germany (30).

Companies with slim paid-time-off policies could be losing the benefits afforded by such generosity. The International Journal of Manpower published a 2025 Florida Atlantic University and Cleveland State University joint study that demonstrates how PTO policies reduce turnover for all workers, regardless of how satisfied they are with their jobs or whether they have flexible schedules. In addition, voluntary turnover—when an employee quits as opposed to the company firing or laying off the individual— dropped by 35 percent when companies offered employees PTO. According to the study, US businesses lose more than $1 trillion each year because of voluntary turnover.

Employees are also getting burned out at a higher rate than in the past. According to Future Forum's 2023 report on burnout, 41 percent of US workers said they were burned out, a 2 percent increase from two years prior. By comparison, the burnout rate for Japan, which offers 26 days of PTO, is 27 percent.

PTO policies also affect recruitment. Financial services firm Empower found that one in five US employees would turn down a job that didn't offer unlimited PTO.

Employers can easily fix the concern, however, and make themselves more attractive to prospective and current workers. PTO comes at a relatively low cost for businesses: around $2.94 per hour per employee, notes the joint study. Businesses can also highlight their efforts for applicants. A 2024 Indeed study reveals that mentions of "PTO" on job postings on the job board website more than doubled from January 2020 to May 2024.

Current employees also want to see loyalty repaid. Empower's study shows that 77 percent of employees think they should get more PTO for longer tenure with a company, and 85 percent say taking vacation increases their happiness.