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Unlimited Vacation – Is it Really What it’s Cracked up to Be?

November 16th, 2018

Unlimited Vacation Facts

The HR landscape is constantly changing, but in recent years there have been some employee engagement trends that are becoming more and more popular. With the increasing emphasis in our culture of a work/life balance that actually contributes to more well-rounded health and wellbeing, unlimited vacation is a hot topic among companies and HR departments across the country.

How does it work?

The concept itself actually is as simple as it sounds. With unlimited vacation, an employee is welcome to take as many days as they want, and it’s not dictated by a typical PTO cap. Sounds like an amazing perk, right? Well, it can be. Although, in most cases, employees offered unlimited vacation as a benefit rarely take more days off than workers who are offered a standard PTO package and get 2-3 weeks of vacation time throughout the year. That being said, there are ways to use unlimited vacation to your advantage – not only for your employees but also for your business.

Where does it come into play?

Most often in the current landscape, you’ll see this as a benefit in startups to help compensate for less-than-ideal salaries, or in higher level executive positions. It could easily become a more widespread benefit, but as an employer, you should know where to draw the line. Here, the line is very clear: unlimited vacation should not be offered to nonexempt employees whose paid time is governed by wage and hour laws.

If you’re considering offering unlimited vacation, you should be aware of how to set your workers up for continued success even when the benefit may allow them to be out of the office more frequently. Ensure that the guidelines are clear – yes, you have unlimited vacation, but you are still expected to get your work done to the same quality and with the same efficiency as you would if you didn’t have this benefit.

Is unlimited vacation effective?

It can be extremely effective. Often, this benefit can be found in companies where the belief is that workers can be trusted to get their work done well and one time, and face time for the sake of face time in the office is less important than that productivity output. Unlimited vacation can imply a sense of trust in your employees that can go a long way in fostering goodwill within your organization.

However, implementing this benefit within your company may also require a shift in culture in order to achieve maximum productivity. Research indicates, continually, that vacation time actually increases employee productivity, engagement, and retention. But if you have this benefit in a workaholic culture that doesn’t encourage proper use of the benefit, you could hurt productivity and morale.

What’s culture got to do with it?

It’s been shown that, on average, employees with unlimited vacation actually take fewer days off a year than those with traditional PTO caps. This is, in part, due to the fact that most organizations have a “use it or lose it” policy that encourages employees to take their full time off in fear of losing out if they don’t. If you’re looking at an unlimited vacation as a possibility, be prepared to shift your culture so that you encourage employees to take advantage of the benefit. Dismiss the fear they may have of being away from the office for too long, and lead by example.

Creating an environment that encourages taking time off and recharging properly starts at the top. If employees see management prioritizing their own balance and taking time off, they will feel more comfortable following suit. When employees are taking time off without fear of backlash, they are less likely to burnout, and are more likely to remain fully engaged in the position and the organization as a whole, making them highly productive members of your team.

If possible, you may even consider offering incentives to encourage employees to take advantage of the unlimited vacation benefit, such as travels stipends, sabbatical bonuses, or other programs that get your workers away from their desk and out into the world more often.

Unlimited vacation may not be the right choice for every organization, but there are certainly benefits to the offering if you can implement it well, and encourage utilization of it throughout your team. If a highly engaged and productive team is your goal, it’s worth considering, at the very least.