Companies like Netflix, General Electric, and HubSpot have gained attention lately by offering unlimited vacations to their employees. The United States has the reputation as the "No Vacation Nation" and these programs are trying to correct that trend and address employees' concerns about work-life balance. Is unlimited vacation a short-lived fad or the way businesses are going to have to operate to attract top talent? Take a look at the benefits and drawbacks of unlimited vacation outlined below and consider whether it's right for your business.
Vacation Revival
Today's workforce requires work-life balance and unlimited vacations feed into that autonomy. Unlimited vacation policies shift employee-employer dynamic to a relationship of equals. Through an unlimited vacation policy, employee morale can be boosted and mutual respect bolstered. Employees work with their managers to discuss job duties and manage time off, which requires more accountability from employees and better communication with managers. Unlimited vacation changes the dialog between management and employees for the better.
From an HR standpoint, unlimited vacation eliminates the paperwork associated with paid time off. Rather than having to track and monitor accrued time off, vacation time is at the discretion of the employee and their manager. When an employee leaves, they leave without accumulated time off and they never reach a "limit" of time off that is either lost or paid out. This streamlining of the HR process makes timekeeping easier and reduces paperwork when employees leave the organization.
Business Downfall
Many companies who have enacted unlimited vacation policies have been those based in Silicon Valley where attendance doesn't always equal productivity. For the coffee shop across the street or the local hospital, unlimited vacation could lead to under staffing and potentially dangerous situations. Implementing an unlimited vacation policy would require that businesses carefully monitor employees and train managers to better manage schedules to avoid short-staffing.
Another area where unlimited vacation policies falter is with abuse, both for the employee and the employer. The obvious argument against unlimited vacation is that a percentage of employees will abuse the privilege, taking excess vacation time and not meeting their job duties in the process. With no strict requirement on time off, these employees whose absenteeism affects their job performance become harder to motivate or eliminate from the organization. From the organizational standpoint, removing specific time off periods may lead to employees working longer and being restricted from necessary time off. Implementing an unlimited vacation policy requires clear guidelines which can be difficult in an 'all or nothing' policy.
The Verdict
While the unlimited vacation policy debate continues to play out, it's obvious that those companies interested in enacting this perk need to carefully weigh the benefits with the drawbacks. Unlimited vacation is a sensationalistic word and for many companies, implementing a "self-managed PTO" policy or "responsible time off" plan can create a more realistic expectations for employees while still increasing morale and offering more flexibility. Regardless of the name though, the policy needs to have more direction for employees and managers to ensure that neither side feels abused. Managers need training in better scheduling and documenting employee performance while employees need guidelines how time off will be granted and what responsibilities the employee has prior to using time off.
With the success of unlimited vacation policies in some industries, this fad isn't going anywhere fast so the data will continue to pile up. Until then, exploring the benefits and drawbacks can help your business create a more open time off policy that benefits your business by attracting top talent and improving morale while also benefiting your employees with more responsibility.
