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“Unlimited” vacation for employees: intentions vs. results

Time-off philosophies are changing a bit with some companies, mostly small or growing start-ups, now offering “unlimited” vacation as an employee benefit. The term is misleading—Could someone take a year off? Probably not—so other more accurate phrases, such as “flexible vacation” and “self-managed vacation,” are starting to be used as well.

Unlimited vacation has advantages and disadvantages for both employers and employees. It’s not a great fit for most companies, and few have made the switch from the traditional vacation benefit. Only about 1 percent of U.S. companies offer unlimited time off, according to the Society for Human Resource Management. The idea originated with Silicon Valley companies but has since been implemented in other regions and industries.

The concept of unlimited vacation is meant to promote work-life balance and encourage employees to take off and return to work refreshed and happy. Proponents say it also shows trust in employees by giving them more control over their work time and leisure time. Some firms claim an additional advantage of reducing red tape associated with tracking workers’ time off.

Although some companies say it’s working for them so far, others have tried it and determined it wasn’t right for them. Kickstarter abandoned its unlimited vacation policy after discovering that employees were actually taking less time off—surely not the intent. But that’s not unusual.

With unlimited vacation, employees still take about the same amount of time off that they did previously—a day or two more or less, depending on the company. Some employees take less vacation time because they don’t know how much is appropriate and are concerned about taking too much time. That’s why some companies, even some with traditional vacation plans, mandate a minimum number of vacation days that employees must take.

Project: Time Off, a coalition of organizations that promotes more employee time off, says that during 1976-2000, Americans used, on average, 20 vacation days per year. That number fell to 16 days by 2013.

Less employee time off can lead to a drop in employee morale and satisfaction. Many employees sacrifice aspects of their personal lives to spend more time at work. Cait DeBaun of Project: Time Off says that “employees tend to miss an average of three notable events in a year because of work.” She likes the idea of a mandatory minimum number of vacation days—it encourages time off while setting limits that employees expect.

I think that companies can gain the trust of employees without opening the Pandora’s box of unlimited vacation, which some employees may try to exploit. Unlimited vacation has other drawbacks, too. Businesses have busy seasons that aren’t conducive to vacation time. Those times may be holiday periods, just when some employees would like the flexibility to take vacation time. So, limitations still must be established, as do procedures for scheduling and approving time off.

I prefer a modified flexible policy, with a set number of vacation days per year but allowing managers the freedom to award more days based on high performance. This would allow employees to earn more leisure time while the company benefits as well—a win-win for both employee and employer.

No matter what policy you determine is the best fit for your company and workers, be sure to have written guidelines in place for all employees and communicate any changes in detail to everyone.

Do you need assistance with establishing employee benefits, workplace communications, training, finding candidates or temp staffing? At TriStarr, an HR consulting firm and recruiting/temp agency in Lancaster, Pa., we would be glad to partner with you for a solution to your HR challenges. The team at TriStarr’s professional staffing service has more than 60 combined years of administrative staffing, recruiting and HR consulting experience. Contact us online, or give us a call at (717) 560-2111.

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