The Unintended Consequences of Adopting an Unlimited Vacation Days Policy

Some bosses give employees the freedom to turn up for work when they want, let them decide how much vacation to take and how to manage their time as long as they still complete all the work expected of them.

This may sound like a hippy, chaotic, free-for-all with no one turning in for weeks on end, but an increasing number of well-known companies let employees take on this responsibility. The aim is not to track time, but results. If employees are smashing targets but hardly at their desks, then so be it.



How Does It Work?

Unlimited vacation days policies work in two ways – companies can either set a minimum vacation period which all employees must adhere to, or they can take away the cap on days off and let workers take time off whenever they want.

Either way, managers do not monitor time off, but leave the task to workers – providing they give notice of vacations and make arrangements for covering projects while they are away.

These Companies Offer Unlimited Vacation to Their Employees

So, who are the employers spearheading an unlimited vacation policy?

One company ahead of the curve is streaming media giant Netflix.

In 2004, it became a pioneer in the unlimited vacation space by offering unrestricted time off to all its employees. When it issued its "Freedom and Responsibility" company culture document, Facebook’s COO, Sheryl Sandberg, said that it “may well be the most important document ever to come out of the Valley."

The Netflix management team focus on results, not micromanagement. Independence breeds responsibility and employees are happier, focused and more productive, says the company.

After witnessing the company's success, many others followed suit. Two noteworthy examples include LinkedIn and Virgin Group.

Unlimited Vacation Policy

Business magnate Richard Branson announced Virgin Group's unlimited vacation policy last year.

"It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel a hundred percent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business — or, for that matter, their careers!" said Branson.

Several smaller tech companies have also begun rolling out unlimited vacation policy.

Two other well-known online brands include Pocket and ZestFinance.

Pocket is an app for saving web pages, videos or other online content for later viewing, whereas ZestFinance assists working class Americans access low-cost credit.

Both offer unlimited vacations among other perks, such as gym membership, catered lunches and every day is a dress-down day where workers can turn up wearing whatever makes them comfortable.

The Advantages of An Unlimited Vacation Policy

Unlimited vacations are a bit like all you can eat buffets. Although the opportunity is there to abuse the system, in the same way that a hungry diner can pile up their plate with uneaten food, few people do.

“From all the things we are seeing and companies we talk to, it seems to indicate that employees who can take unlimited vacation are not taking any more or less vacation days,” said Bruce Elliot, manager of compensation and benefits at the Society for Human Resource Management.

In fact, statistics show that the typical American worker does not like taking too much time off. In 2000, the average was 20.3 vacation days a year, which dropped to 16 days by 2013, says Project: Time Off.

Will It Work In the U.S.?

The last year has seen an increase in the number of companies introducing unlimited vacation, but critics suggest only in the trendy, bohemian cities and mainly in tech start-ups.

The perk is not widespread as only 1% of companies offer unlimited paid vacations, according to the Society for Human Resource Management.

But that does not mean more free-thinking employers won’t offer unlimited vacation sometime soon, especially as the benefits become more well known.

In the four years since instituting vacation minimums, HubSpot has seen revenues grow from $15.6 million to $77.6 million and has been the number two fastest-growing software company on the Inc. 500, according to Project: Time Off.

Results like these will make the policy more attractive for skeptical employers in the coming years.



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