Unlimited Vacation: Will It Work For Your Company?

I think most if not all employees would love to work for a company where they had unlimited vacation. What a great benefit, it would certainly make it easier to recruit employees. More and more articles are appearing in business magazines and blogs touting unlimited vacation time. The question is, will it work for your company?
In the January 5, 2012 online version of Inc. magazine an article entitled Give Your Employees Unlimited Vacation Days was published. It was written by Joe Reynolds, who runs a company called Red Frog Events. Mr. Reynolds provides unlimited vacation to his employees and says it has been great for his company. Apparently it has been as his company was selected as the 2011 U.S. Chamber of Commerce Small Business of the Year and recently won the Chicago Innovation Award as well as the Chicago Tribune Best Workplace. Nice accolades. Mr. Reynolds says in his first paragraph “The 9 a.m.-to-5 p.m. workplace is almost dead. Throw your preconceived notions about vacation out the window and give your employees the no-strings-attached, unlimited vacation days they deserve or you’ll soon be a dinosaur.” He points out that doubters say that it cannot work or is not real or that employees will take advantage of it.
Reynolds says that with the right culture, on of responsibility and accountability, it will work to make your employees more productive and it will not be abused. He lists four points to bolster his argument:

  • It treats employees like the adults they are. If they’re incapable of handling the responsibility that comes along with having unlimited vacation days, they’re probably incapable of handling other responsibilities too, so don’t hire them.
  • It reduces costs by not having to track vacation time. Tracking and accounting for vacation days can be cumbersome work. This policy eliminates those headaches.
  • It shows appreciation. Your employees will need unexpected time off and some need more vacation than others. By giving them what they need when they need it, you show your employees how much you appreciate them and they reciprocate by producing more great work.
  • It’s a great recruitment tool. We hire a mere one out of every 750 applicants at Red Frog. When you combine fantastic benefits with a positive culture, it’s noticed.

Reading this material reminds me very much of descriptions of ROWE workplaces. (Results Only Work Environments) ROWE workplaces focus heavily on the results of someone’s work and do not focus on the number of hours worked, either in amount worked or in when the work occurs. Great to do if you have the proper set up, however, as I wrote in AMPing Up Your Employees: Motivation According to Pink there has to be a special set of circumstances in order to make this successful. First it helps if you pay everyone on a salaried basis. Not everyone does that. Secondly it helps if everyone is a full time employee. Not every company has that. Thirdly it helps if you have a very careful hiring process. Not everyone does that. (Read this discussion to understand the downfall of that.) It helps if everyone is an exempt employee. Not every company does that, in fact under the FLSA that is very difficult to do. Lastly, it helps if company is making a very nice profit. Not every company is doing that. Oh one final thing, it is probably best done in small companies.
Don’t get me wrong. I would love if all companies could provide that kind of benefit. The U.S. is often criticized for not operating like European companies with the amount of time off given to employees. I just think we are not going to see such a system for a long time. We have an archaic system of employment regulations that make it difficult; we have a very long history of it NOT being done that way that would have to be overcome; and we have the vaunted “Puritan work ethic” that today keeps people from even taking their full complement of vacation time. The last thing that gets in the way is the question people will ask “What do I do with all that time? I don’t have enough money to be on vacation that much.”
Any readers out there that have unlimited vacation? If so, tell us how it works.

5 thoughts on “Unlimited Vacation: Will It Work For Your Company?”

  1. My company has not adopted the Unlimited Vacation Policy but we have found a way to track our working and vacation time in a less cumbersome fashion…. we use a mobile time tracking app that allows us to track our time – whether from the office, from home, or even if we clock a few hours from the pool – and all the reports are generated automatically for the managers. It’s provided amazing flexibility and by reducing the tedious hours previously wasted on tracking and reporting our time, we can now spend more of our time on vacation!

  2. We do not track time off for our exempt employees. We are a small company – approximately 55 employees right now – and I recognize that’s one reason it works. What we’ve found is that people tend to take less time off, so it often takes some coaching to make sure people do take time for themselves to recharge. In an environment where people are checking their email during most of their waking hours (because they can, not because we’re asking them to do so), not tracking time off is a nod towards their dedication and tells people we trust them to do their jobs.
    About a decade ago, this is was one of our first decisions. Around 2006, it was abused, and we didn’t have strong enough management practices to handle it well. We instituted a PTO policy for all employees. A year ago, we revisited our practices and decided we had a strong enough management structure to try it again. We’re happy we have. Our people are dedicated and work hard. The least we can do for them in return is treat them respectfully, like adults.

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