Is Unlimited Vacation Best for Me?

Unlimited vacation… It sounds really good, right?! But, is it?

Business Optimizer reviews the experience of companies that are adopting an unlimited vacation policy and asks what the benefits are of such a flexible unlimited vacation allowance.

The idea behind an unlimited vacation policy is that it reorients the focus from putting in a certain number of hours to producing results.

The case for unlimited vacation

Writing in The Muse, ZenPayroll Co-founder and CEO Joshua Reeves makes the point that his company’s flexible vacation policy helps to build an ownership mentality.

“We want our employees to think like owners and consider what’s best for both themselves and the company. Letting them figure out their own vacation time shows that we trust and respect them, which in turn strengthens their commitment to the company,” Reeves explains.

For employees, unlimited vacation promises to give you greater freedom over vacation time – freeing you from the need to “earn” your entitlement or negotiate over days you may not have accrued.

Stacie Lastoe, also writing in The Muse, argues, “There’s no keep count. You don’t have to wait to accrue vacation time before you can take the break you need to ultimately do your job better.”

The case against unlimited vacation

Not everyone sees the employee benefits of unlimited vacation, however. Writing in the Financial Times, Pilita Clark describes the policy as “one of the most annoying fads to come out of Silicon Valley in the past few years.”

She makes the point that evidence is already accumulating to show that employees typically have less time off at companies that offer unlimited vacation schemes when compared to those at more traditional programs.

Instead – at least in the short term – unlimited vacation policies tend to favor employers. Aron Ain, CEO of Kronos Inc., told the Harvard Business Review how fellow executives in other companies had explained the benefits thus: “you get to save so much money that you would have paid out to people who had left the company as accrued vacation.”

After calculating that could save his company two to three million dollars per year, Ain decided to press ahead with an unlimited vacation scheme but to use those funds to invest in paid leave entitlements such as improved maternity leave and paid paternity leave.

How to make unlimited vacation work for everyone

In HBR, Ain outlines some of the challenges Kronos faced when introducing its “open vacation” program. These included:

• Encouraging managers to have more active vacations with staff about their vacation plans
• Improving vacation planning, so not everyone is gone at the same time
• Regularly helping team to take leave for improved work-life balance

Taken annual vacation time has increased by 2.6 days per employee since implementing the scheme.

Based on his experiences at ZenPayroll, Reeves makes three suggestions for anyone working in an unlimited vacation program:

• Understand the expectations, especially concerning approval processes
• Know what is acceptable – and what’s not – by asking your manager or colleagues
• Communicate time-off plans, giving as much advance notice as you can

It is true that unlimited vacation programs can lead to people working even harder and taking less time off if they aren’t properly managed and communicated.

But, when implemented well with the goal of employee empowerment and sustainable work-life balance at their heart, they can result in significant benefits for employee and employer.

Ain states, “it’s easier to recruit or, more importantly, easier to get people to say yes because we differentiated ourselves competitively, but it’s also led to Kronos’ continuing momentum as the best place to work winner.”

This is definitely a topic to think about, don’t’ you think!