Vacations aren’t just a nice perk to offer your employees — they’re actually essential to employee health and productivity. No matter how much your employees love their jobs, stress from overwork can affect performance. Unfortunately, nearly half of Americans don’t take advantage of their vacation days.

Taking time off produces several benefits for your employees. It can reduce stress, improve sleep and decrease burnout. Employees aren’t the only winners. When your employees take time off to relax, spend time with family and take care of themselves, everyone in the organization wins.

Here are three benefits of offering unlimited vacation time to your employees.

Attract and Retain Employees with Flexible Hours

The ability to take time paid time off whenever it’s needed is a huge benefit that can also be a critical differentiator for your organization. In fact, one study found that 72% of employees are interested in paid time off. “An unlimited PTO policy invites new hires,” says Martin Luenendonk, co-founder of Cleverism. Encouraging employees to take time to unwind is critical to attracting and retaining employees.

Typically, unlimited PTO doesn’t translate to your employees jetting off to the beach for weeks at a time. Prospective employees are looking for organizations that offer flexible time off for when needs arise, says Emma Brudner, director of people operations at Lola.com. “The peace of mind that an unlimited vacation policy affords is huge for attracting and retaining top talent,” says Brudner.

Reduce Administrative Tasks Surrounding Vacation and Scheduling 

The administrative tasks surrounding time off can be tedious and time-consuming. Brudner points out that an unlimited PTO policy has the collateral benefit of eliminating the need for administrative PTO tracking, giving HR more time to work with the C-suite on more valuable strategic initiatives.

Unlimited vacation policies also encourage employees to pace their own work. This results in a better working environment and helps employees identify when they can best take advantage of time off. An unlimited PTO policy can discourage employees from saving vacation days and spending all of their available days at the end of the year, Luenendonk said. This can leave many companies understaffed in the final quarter of the year.

Enhance Productivity with Time to Recharge

Finding the right balance between work and home life is essential to employee productivity. “Flexible PTO helps employees feel comfortable and productive at work because they can manage time for their family and personal life more efficiently,” Luenendonk said. Taking the stress and uncertainty out of time management will help your employees identify and regulate their individual needs.

“Typically, people will be more committed to their jobs when they don't feel nickel-and-dimed with time off,” Brudne said. Empower your employees by giving them the option to take an afternoon off for necessities without jeopardizing their family vacation. Employees who are invested in your company will not take advantage of your generosity, Luenendonk said. They know the value of their work and are capable of regulating themselves and taking time off for their own well-being so they can come to work refreshed.