Rich Crocco

Do You Want Unlimited Vacation Days at Your Job?

Hawaii Sunset

Welcome to my new blog which will be investigating and analyzing financial topics that are relevant in today’s business world. Whether you work in finance, accounting or running your own business, this blog may be helpful in keeping abreast of and understanding key issues that businesses face.

The topic I am interested in today is company Unlimited Vacation policies. This small but growing trend in start-ups and small businesses is providing a new way to think about vacation policies.

We all know the traditional types of vacation policies we usually come in contact with in the workplace i.e. accruing a bank of vacation hours each year that employees can redeem, accruing fractions of vacation hours with each actual hour worked, or just receiving a set number of days off each year. These policies are also sometimes combined with sick time, personal time, etc.

The concept of unlimited vacation gets rid of the administrative aspect of enforcing and auditing a traditional vacation policy and instead the company trusts the employee to 1) not abuse the policy and 2) make sure taking vacation days does not reduce the effectiveness of his/her job.  With an unlimited vacation policy, employees take as much vacation time as they need as long as their work does not suffer.  This new trend centers around the idea of treating employees as “responsible, trustworthy adults” as mentioned in the money.CNN.com article “Unlimited vacation.  It may not be as cool as it sounds.”  How would your employees handle an open ended policy like this? Would they rise to the occasion of being treated with a higher degree of respect? Or would they look for ways to abuse the system?

According to the Forbes.com article “Could Unlimited Vacation Time Work For Your Company?” Only 3% of businesses in the United States are employing an unlimited vacation policy.  Of these 3% there seems to be mixed reviews.  According to qz.com’s article “How to have a successful unlimited vacation policy” Tribune Publishing rescinded its unlimited vacation policy within a week because of employee complaints.  Other companies such as Netflix, Groupon and The Virgin Group (founded by Richard Branson) are executing successful unlimited vacation policies.

One aspect of an unlimited vacation policy that a company should consider is how your employees would interpret this change.  Would they see it as a signal that taking vacation is frowned upon?  Studies have shown that on average Americans take approximately half of the vacation due to them.  Would they take even less as a result of a policy like this?  Or would your employees go the other way and take as many vacation days as possible therefore rendering the policy a failure?

In considering a move to unlimited vacation it will be important to consider 1) what type of workforce you employ, for example, mostly non-exempt employees that must be covered any time they are not physically on the job (may not work for an unlimited vacation policy) or mostly exempt employees that can be productive from home or anywhere else (even vacation??) and 2)  how your workforce would  perceive such a policy.  Company vacation policies exist so that employees have the freedom to do what they want/need to do outside of work.  If an employer has a workforce with the right fit for flexible vacation and the policy was well executed with employees understanding that the company supports routinely taking vacation, then maybe that 3% statistic will grow in the future.

 

 

11 thoughts on “Do You Want Unlimited Vacation Days at Your Job?”

  1. This is interesting. It would seem to have a better chance of success with a smaller company where people hold each other more accountable for their activities. Large companies that have a number of separate groupings of employees may be harder to control. I like the idea of this though.

    1. Isn’t that the case anyways? Haha, just kidding! Actually some companies are employing this unlimited vacation strategy in get closer to the European averages of vacation time (around four weeks a year).

  2. Right now my husband works for IBM. He has a lot of vacation days but has trouble tLing them because he is one of the only people who can do his job. He usually loses days at the end of the calendar year or has to take half days and 3 day weekends. Right now he is in South Dakota caring for his ailing mom and is telecommuting from there. It is a vicious cycle.

    1. This could be an example of one of the ‘cons’ of an unlimited vacation policy. In your husband’s case he has a hard time redeeming the vacation he is due, however with unlimited vacation the “un-vacation” policy could lead to even less vacation taken rather than leading to a healthier amount.
      Thanks for the comment!

  3. Past tense no, future yes. In the USA the norm is 2 wks vacation, Europe numerous vacations, even the military gets30 day leave a year. I did a work study n discovered you are lucky if you get 5 hrs of work out of an employee for8. Hrs work. Its6of 1 n1/2of the other
    Good topic for discussion

  4. Yes, you could make the argument that companies are paying out the vacation time anyways in the form of less productive employees. A well executed unlimited vacation policy could lead to increased production when employees are on the job.

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