Time Out Already!
Executives take vacations in spite of the downturn
Executives take vacations in spite of the downturn
But here in Northeast Wisconsin, one impact that apparently has yet to be experienced by hard-working senior managers is the erosion of well-deserved paid time off. Often a component of paid time off benefit packages, vacations are seemingly being taken by executives without worry, according to area senior managers and human resources professionals alike.
For example, consider what members of the senior management team for Integrys Energy Group, Inc. with offices in Green Bay, say. Upon learning that Insight magazine was researching this topic, Integrys executives polled themselves during a break at a recent meeting in Chicago. They learned that, without exception, vacations were taken as planned, just as in previous years, and not altered as a result of business pressures, according to company spokesperson Todd Steffen.
“I guess we’re just boring and status quo around here,” Steffen quips, adding “nothing has changed as related to the economy and vacations.” He explains that Integrys’ senior managers believe vacations are a “personal and private choice” for all employees, who have every right to take earned vacation when it is part of their benefit packages.
Executives at Independent Printing Co., Inc. in De Pere similarly are not shying away from taking their earned vacation this year. “We have not noticed anything out of the ordinary,” says Dan Simons, vice president of administration for Independent. He is one of six members of the company’s senior management team.
At Enzymatic Therapy, Inc., a Green Bay-based manufacturer and marketer of therapeutic dosage natural medicines and nutritional supplements, executives might have plenty of reasons to forgo vacations – possibly not only for the summer months but for the entire year. After all, the company is engaged in a merger with Nature’s Way in Springville, Utah, with plans to complete the transaction in fall 2011, according to its human resources specialist, Lou Ann Brown. Nature’s Way is regarded as one of the largest and most technologically advanced of all supplement manufacturers in the United States with more than 500 premium nutritional and natural products.
Like Steffen and Simons, Brown reports that vacation use among executives appears to be “the same as usual.”
“There have been some scattered reductions in force since January” as Enzymatic Therapy prepares for the merger, Brown explains. She emphasizes that they have had more to do with the merger than with the economy.
Cost-cutting, when necessary, has not taken the form of cutbacks in vacation or other parts of employee benefit packages, she says. It also has not mandated staff furloughs.
Denise Knutson, a senior consultant with The H.S. Group, which provides career management services to small- and medium-sized companies as well as Fortune 500 firms, notes, in her work with various companies in the area, “people … said they weren’t seeing any differences” in executive use of vacation time.
However, Knutson points out, according to a recent survey conducted by her company, 22.5 percent of area companies have required mandatory time off for their employees – either on a temporary or permanent basis – as they cope with the effects of the economic slowdown. She adds that “executives have not been exempt” from those mandates, which can take the form of a day off each week, such as every Thursday; a shortened work week, such as every Friday afternoon; or one or two weeks off to be taken sometime during the year at employees’ discretion.
Employees impacted by such measures are generally not compensated for time spent on furlough.
Knutson says another survey finding indicates that companies experiencing the same or better revenue than in the previous year did not make any changes in vacation or paid time off. The survey also reveals that, among companies that experienced a revenue decline this year when compared to last year, only one company chose to reduce employee vacation or PTO, but only on a temporary basis.
If there is a need for cost-cutting, many if not virtually all employers would turn to exploring the concept of furloughs vs. tinkering with vacations or the other contents of benefit packages, Knutson adds.
“Companies are being very careful to making changes to benefit packages,” because of the general permanence of those adjustments, Knutson continues. Furloughs are viewed by employers as easier solutions to what is hopefully a short-term situation.
“Executives don’t make these decisions lightly,” she says.
According to Knutson, furloughs are almost exclusively positioned by employers as temporary.
“They send a message that we are all in this together. They send a message that, when things get better, everyone will share in the rewards,” says Knutson.
