We Offered Our Employees Unlimited Vacation, Here’s What Happened

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I have clear memories from childhood of driving from Florida to New Jersey to visit my grandmother. We would take back roads for a while, stop frequently to visit historic sites – my father was a historic preservationist – and then run the highway for the boring bits.

We_Offered_Our_Employees_Unlimited_Vacation,_Here_s_What_Happened

My sister and I were packed in the back of our ’77 Plymouth Volare station wagon with the vinyl bench seats. We would alternate playing and yelling at each other, and when she was sleeping I would count the tractor trailers we passed.

I loved those trips, even though I always got tired of being in the car. I imagine my parents were less enthusiastic.

Here they were, lugging these two screaming, cash sinkholes around the Eastern seaboard on the ten days every year they weren’t required to work. Does that even count as a vacation? I get tired just taking my kid to the grocery store. If you’ve only got a handful of days off, those days are going to mean the world to you.

To combat this problem, companies across the spectrum have started offering unlimited vacation. The usual setup is thus:

  1. Get your work done to the required standards.
  2. Make plans with your manager.
  3. Drink a margarita and watch the Mexican sunset.

Unlimited vacation made an appearance at Capterra, in fact. For all of 2015, we took off as many days as we wanted. We slept, ate, saw friends and family, traveled the world, and stuck around our houses.

We also tracked our days off to see how things were going. By comparing 2015 days off to our 2014 data, we can see if that blissful year changed the way we relaxed.

It’s actually pretty similar. Yeah, we didn’t really jump in with both feet. In 2014, employees took an average of 28 days off, including holidays and adjusted for hire date. In 2015, we took just over 26 days, on average.

Why are we still here?

Intuitively, you would expect a larger jump in time off. Walk into the average middle school and tell the kids they can show up as they see fit. I’ll tell you this – you’re going to need to fire some bus drivers.

The key difference is, of course, we’re adults. We care about the work we do, we want to advance our careers, and we just have to get things done. As it turns out, we’re comfortable taking between 25 and 30 days off over the course of a year. We feel like that gives us enough time to get everything done and to relax at the same time.

Our CEO, Mike Ortner, feels the same way. Unlimited time off “is a nice perk, reinforces trust in employees, and continues to encourage them to use their best judgment in everything they do. It treats them like mature adults.”

This isn’t too far off the results other companies dabbling in unlimited vacation have ended up with. Mammoth, an HR outsourcing firm, gave the unlimited system a whirl a few years ago. It ended up giving employees an average of 24 days off – including holidays – under both systems.

When pondering why you would switch to an unlimited system, CEO Nathan Christensen wrote, “[Unlimited] vacation is at least as valuable for what it says as for what it does.”

What does it mean to give someone unlimited vacation?

What unlimited vacation – or all you can eat or unlimited cash back – says is, “I trust you to know your limit.” Giving someone the opportunity to make decisions about the way they spend their time shows that you trust them to be intelligent.

Luckily, we naturally limit ourselves when faced with an unending supply of something. All you can eat buffets still manage to make money because we eventually tire of the food in front of us or feel guilty for eating so much.

Vacation works the same way. If you give someone unlimited vacation, you’re going to find that they take roughly the same amount that they’ve always taken. At some point, we feel compelled to actually do the job we’re paid for, or we just get tired of being away.

Americans aren’t great at going on vacation because we never really get the time to do it. As a result, we often stress about the work we’re missing or the things we have to check off our lists or just the value we’re getting out of every non-at-the-office moment. Even if we weren’t this way, we’d still find being on vacation tiring.

That’s because being on a break is part of the cycle of working and feeling productive. We recharge our batteries or refresh or renew ourselves, but all of that is done in anticipation of being able to expend that energy in a productive and fulfilling way – we want to work.

Considerations when implementing unlimited time off

I think letting people take the time they want is a great system. It’s not going to be for every business or every employee, though. Making the system work requires building a business from the hiring process up. You have to know that the people you’re giving all this autonomy to aren’t going to turn it into a logistical or HR nightmare for you.

If you’re Jeff Bezos, you’re in luck – unlimited vacation is probably a great fit. If you’re Steve Easterbrook, CEO of McDonald’s, you might want to hold off.

Having great people doesn’t mean unlimited vacation is the right approach, though. There are other issues at play besides trust.

Foremost is that accrued, paid time off is often considered a perk in a way that unlimited time off isn’t. Employees know they have that time – which is effectively money – stored up. If they leave the company under normal circumstances, they’ll likely be able to cash out those accrued hours. This isn’t the case with an unlimited policy.

A piece in the Boston Globe points out that making vacation unlimited can also put managers in the sticky position of being vacation judges. Is three weeks off in a row too much? What about four? What if I take five but work the middle week remotely? These are all things you’ll need to sort out before you dive into a new system.

Still worth it

Even with all the little complexities that go into unlimited time off, I still think it’s a good system. You have to be doing it for the right reasons, though. Trust and a genuine concern for your employees’ well-being are the reasons you should be considering paid time. Cutting down on you accrued vacation liability is the wrong reason.

I really like what Buffer has done with its policy. Not only does it give people unlimited vacation, but it also gives them $1,000 to go on a weeklong vacation, once a year – it also chucks in $500 bonus per dependent to cover all those $9, Disney-branded hot dogs. The addition of the cash and the focus on taking a whole week makes employees feel like the policy is in place for the right reasons, not to cut costs.

Overall, time off is supposed to be a relaxing thing in all its phases. Your employees shouldn’t be stressed out because they have too little time or because using the time they have is too difficult. If you’re genuinely interested in providing a positive work-life balance, give your people the tools they need to enjoy life.

Let me know in the comments if you’ve implemented or considered a non-standard vacation policy. I’d love to hear how it went.

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About the Author

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Andrew Marder

Andrew Marder is a former Capterra analyst.

Comments

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It seams that there is a business culture “war” between USA and Europe.
In Europe the work-life balance is enforced by law (strict work schedules, no business emails outside working hours, not flexible vacation days per year etc), while in USA by freedom and employee choices (flexibility in everything – even for days off!).
Although I definitely prefer the American way, I am not sure which is the case for the majority of business workers.

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