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How would you feel if your employer made you take a vacation and handed you a bundle of cash on top of your normal salary to pay for it? It seems like a good deal right?

That’s what Kipp Chambers thought at first, too.

In October he took his fiancee, now his wife, on a two-week trip to Greece. A veteran of several startups, it was the first time he'd ever managed to get away for more than an extended weekend. But, there was a catch built in to his company’s offer. The 34-year-old had been instructed to stay out of contact with the office. No email, social media or phone for work.

“It made me feel horribly nervous for the first few days,” he said. “I kept feeling phantom cellphone rings in my pocket.”

In the long run, though, it was worth it.

“It was so different from when I used to take those short vacations,” said Chambers, who is marketing engineer for FullContact in Denver, Colorado, an online address book startup where paid vacations are mandatory and accompanied by an additional $7,500 payment. “I came back so much more refreshed….I had about 30 different ideas that could only have germinated… while I was unplugged from the office.”

The health benefits of vacations are, perhaps, not unexpected. The Framingham Heart Study, which has tracked the cardiovascular health of residents in Framingham, Massachusetts, since 1948, found men who didn't take vacations for several years were 30% more likely to suffer heart attacks than those who took off at least one week annually.

Vacations can help mental health as well. Terry Hartig. professor of environmental psychology at Uppsala University in Sweden, a country where five weeks paid time off is a legal requirement for every worker, examined the effects of vacations on mental health.

He and his colleagues looked at national antidepressant use from 1993 to 2005 and found there was a significant reduction in prescriptions when people were on vacation. The decrease was even greater when people were spending their time away from work outdoors.

Good for companies, too

Mandatory vacation policies can also bring unexpected benefits to companies – even if the new policy has a rocky start.

“When we introduced it, we thought this is going to be a great recruiting tool for us, great for retention and the single best mental health facilitator you could get,” FullContact's content director Brad McCarty said. “To begin with, we screwed up. One of our guys took his paid vacation and extraordinarily critical aspects of our company stopped working, so you had people in the office who were scrambling to figure out how to fix it.”

The answer was to draw up 'bus plans.' As in, What would happen if you were hit by a bus tomorrow? No one person holds the answers to any issue now. The company is much healthier for it, McCarty said.

“We can identify possible weaknesses and make sure that even though one person might be the main point of responsibility, they're not going to be the sole point of failure,” he said.

Sourcegraph, a Silicon Valley-based startup that provides analysis tools for software developers, also has mandatory paid vacation policy.

“It's the best way to create a culture where it's OK to take a holiday and it improves communication and team work,” said chief executive officer, Quinn Slack.

“When people know they're going to be totally off the grid, they spend more time communicating their work to the rest of the team, and, as a company, we avoid doing things that are so reliant on one person and difficult to scale up,” he said. 

“I've seen a lot of companies where the non-vacation-takers resent the vacation-takers and vice-versa. That's toxic, and that kind of politics can destroy companies.” 

Neither SourceGraph or FullContact have yet had to deal with an employee who refused to take their allocated time off.

“On the face of it, it sounds lazy, and they might be concerned that their investors would get worried,” Slack said.

“I hope the policy takes off among tech startups, because they stand to benefit from it the most and because they currently have a terrible reputation for discouraging vacations.”

Beyond health benefits

There is one industry famed for its long hours and workaholic culture where mandatory time off has become standard practice.

Most banks and financial institutions require employees take a vacation of two consecutive weeks during which they have to be away from the office and are not allowed access to computer systems, even via smartphones and other devices. It’s not just an altruistic measure, however. It’s reckoned that most ongoing frauds and dodgy trades will show up in that length of time.

In 2008, rogue trader Jérôme Kerviel was convicted of fraud and forgery that led to a 4.9bn euro loss ($6.46bn, in current dollars) for the French bank Société Générale. He said during his interrogation: “A trader who doesn't take vacation is a trader who doesn't want to let anyone else look at his book.”

The former UK regulator, the Financial Services Agency (FSA) recommended mandatory two week holidays in the wake of the Société Générale loss. It wasn't a new idea. The US Federal Deposit Insurance Corp has recommended it for years.

Is balance possible?

There are, however, some who feel we are best served by taking smartphones, laptops or tablets on vacation.

Financial Times columnist Lucy Kellaway, writing for BBC News, described the benefits of doing just that during a 10-day break in Cornwall, England. Kellaway described it as a “worliday”, combining work and holiday.

“I would wake up, do a few emails and then go for a walk by the sea. Later, I might write an article sitting under a window with a view of a stream. After that, I'd go outside to light the coals to barbecue a sausage,” she wrote.

As well as allowing workers to spend longer away from the office, Kellaway also believes it can help prevent the shock of returning to a pile of work.

One of the main shocks:  the overflowing inbox. The solution from German auto manufacturer Daimler is to automatically delete all emails sent to its employees when they’re on vacation (for those who opt-in).

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