Does Unlimited Vacation Really Work?

May 16th, 2018 Posted by Human Resources 0 thoughts on “Does Unlimited Vacation Really Work?”

Welcome to the first in our Does it Work? Series. We examine trends in employment from unlimited vacation to open plan offices and ask one simple question: Does it work?

Take as much time as you need

If you’re an employee, it may sound wonderful. If you’re an employer, it might make your heart run cold. Unlimited vacation. For the last ten years, it’s been at the forefront of discussions of benefits, employee satisfaction, and performance. Depending on who you ask, it can be a boon for business or a major productivity killer.

Unlimited vacation policies have been around for over a decade, but in the early part of the Millenium, they were seen as the purview of radical companies, most often in the tech sector. The kind of company that would refer non-ironically to themselves as “superheroes” or unabashedly position themselves as revolutionary foils to the stodgy old guard.

Where unlimited vacation succeeds

Some companies have seen success with unlimited paid time-off, including Mammoth CEO Nathan Christensen. In an article for FastCompany, Christensen details his company’s adoption of an unlimited PTO policy and he clearly sees it as successful. Interestingly, Christensen reports that the amount of time Mammoth employees took off didn’t change from when they’d had a strict policy. The average paid vacation days for employees (including paid holidays) remained steady at 3 weeks. Where Mammoth found success with their new policy was in how the employees perceived it, rather than how they actually used it.

Christensen identified three major areas where Mammoth saw positive results with their vacation policy: it offered flexibility, demonstrated trust, and it showed that the company saw it’s employees as individuals with unique needs that couldn’t be addressed with a catch-all policy.

Interestingly, the amount of time Mammoth employees took off didn’t change from when they’d had a strict policy. The average paid vacation days for employees (including paid holidays) remained steady at 3 weeks.

Where unlimited vacation fails

Christensen’s results weren’t unique. In 2015, Kickstarter axed their unlimited vacation policy when they realized that without a fixed number of days, their employees were left without a guideline for how much time off was appropriate or expected. In today’s highly competitive corporate culture, vague vacation policies can create inequity. Some employees will abuse the policy, while others will take advantage of a colleague’s absence to get ahead by giving up their own free time. In some cases, unlimited vacation are approved at a manager’s discretion. Some employees may be reticent to request time off for fear of being seen as a slacker or as less dedicated to the company’s success. Kickstarter concluded that setting a limit on vacation days counterintuitively encouraged their employees to take the vacations they’d earned.

These are just two stories available on unlimited vacation policies (see our additional resources below), but they are indicative of the results seen by many other companies. The most common result when implementing unlimited vacation was that employees took less time off. For companies fostering cultures of intense competition and devotion to the company’s objectives, this has been seen as a positive. More time at desks and more money in the bank. For other companies, unlimited vacation became a detriment to their employees’ work-life balance and subsequently a detriment to the company.

Does it work?

Sort of. Our research demonstrates that when unlimited vacation plans do work, it’s because there’s a real plan in place. Employees and managers are both expected to work from guidelines which are functionally the same as policies, except in how they’re marketed to employees and the public. “Unlimited Vacation” is a great buzzword for people who haven’t seen the real numbers. Companies are finding success marketing these kinds of non-policies (see unlimited flex-time) while actually enforcing rules or giving strong guidelines for time off.

Additional Information on Unlimited Vacation Policies

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