According to a recent New York Times article, “One of the trendy perks at progressive companies is unlimited vacation time.” While “unlimited” vacation time might mean different things to different companies, the fact of the matter is that companies are experimenting with different ways to offer their employees vacation time. Some companies truly offer unlimited vacation time with the expectation that employees will be able to complete their workload in a timely fashion. Other companies have no written vacation policy, yet there are unwritten expectations about how much time an employee can take.
While an unlimited vacation policy certainly isn’t for everyone, here are some things to consider:
No matter what policy you have in place or plan to adopt, you should make sure that it is appropriately communicated to all employees. A great place to start is in your employee handbook, which should include all of your employment policies. This is especially handy for new employees who might be curious about how much vacation they can take, or when it’s appropriate to take it.
Make sure your management team is properly communicating your vacation policy to your employees as well. If you offer “unlimited” vacation time, make sure you clarify this often ambiguous policy. Employees should know that the policy is contingent on getting their work done in a timely fashion. According to BusinessWeek, “Working this way is not for everybody, and it can backfire if the company doesn’t have clear and measurable targets for each employee.”
Does “unlimited” mean you’ll never see them?
If your employees are engaged in their work, probably not. In fact, it might even mean that they will take less time off. This may sound strange, but think about it like this… When you have a set policy in place with a set amount of time-off per year (say two weeks), employees feel pressured to use that time. If they don’t, they are losing out on time-off that they earned.
On the other hand, if you have a more relaxed vacation policy, employees are more likely to take time when their workload is lower. They might take a day here and there for a doctor’s appointment or to take their kids to the park, but their vacation time is more likely to coordinate around their workload. Employers should expect that most employees will make time each year to take a week-long vacation or two each year.
Before you book your trip to “Unlimited Vacation”…
Keep in mind that this policy might not be a good fit for every company. One of the main factors in the success of this policy is how engaged employees are in their work. This vacation policy was successful at Netflix because, according to one employee, “It’s being engaged with your job because you love what you do.” (Boston Globe) One criticism offered by New York Times writer Marci Alboher is that, “Doing away with official vacation time can also be a way for employers to escape payouts for unused vacation time when employees leave…” She also asks, “What if there is abuse? Does it make sense to suggest the acceptable number of weeks to take off, or would that undermine the whole concept?” These are all good questions to consider before administering a new policy.
A Real World Example
If you’re looking for ideas from a company that already has an unlimited vacation policy, check out IBM. According to NY Times writer Ken Belson, “The company does not keep track of who takes how much time or when, does not dole out choice vacation times by seniority and does not let people carry days off from year to year.” For employees, the upside of this is the increased flexibility of schedule and for many, a better work/life balance. However employees do say that there is more pressure to always be “on call” while outside of work – many employees feel the need to frequently check e-mail and voicemail, even on vacation.
Sources: “At I.B.M., a Vacation Anytime, or Maybe None,” Ken Belson: August 31, 2007; “Is Unlimited Vacation a Good Thing?” Alison Lobron: July 20, 2008; “Does Unlimited Vacation Equal No Vacation?” Marci Alboher: July 31, 2008; “The Case Against Vacation Policy,” John Tozzi: July 2, 2008.