A recent study by the Society for Human Resource Management in the US has identified a growing trend where employees are allowed to buy and sell vacation time. Perhaps not surprisingly, in a country where almost one in four Americans has no paid vacation, more employees are taking advantage of buying vacations rather than selling them.

In contrast, by law, every EU country has at least 4 weeks of paid vacation.

This begs the question: does time-off (which equals time away from productive work) impact business productivity and economic success?

Interestingly, Senior Economist at the Centre for Economic Policy Research, John Schmitt tells USA Today it doesn’t. He doesn’t see paid vacation time and holidays having a negative impact on the economy. A country like Germany for example is cited as having a generous paid vacation and holiday offering (34 days per year), and still has a solid economy.

Companies like HubSpot, second-fastest growing software company on the Inc. 500 list has implemented an unlimited vacation policy. According to founder and CTO, Dharmesh Shah, this move has only benefited the company with efficiencies. “Employees take vacation when they need it, and we don’t have a spike of vacations at specific points in time,” he is quoted as saying in Fast Company.

Shah may be onto something. Researcher Mark Rosekind at Alertness Solutions found the process of taking a break by way of a vacation actually increased performance by 80%. Employees coming back from vacation had a 40% increase in their reaction times too versus their counterparts.

Now, in a Canadian climate where talent attraction and talent retention are reaching critical priority levels, imagine the competitive power a company could have in offering a stand-out vacation package.

That is exactly the position that FullContact (a Denver-based digital contact management company), found itself in last year. Competing with big companies, to keep current employees happy and to lure prospective ones, CEO Bart Lorang shared in a blog post that all employees would receive $7,500 per year to go on vacation (and they weren’t allowed to work while on vacation!). Judging from the onslaught of media coverage on his new policy, this was not only a great recruiting move, it was also a great PR move! Incidentally, according to Forbes magazine, this company recently secured $8.8 million in financing, based on the strength of its product offering.

While these may be extreme examples, the key lesson here is that yesteryear’s 9 to 5 business model, where every working minute was measured for profit is outdated. Today, productivity is more aptly measured by employee engagement.

The most profitable companies build their vacation policies and employee perks with this “commitment to work” goal in mind versus the outdated “commitment to time” approach.