The concept of unlimited vacation - an arrangement where employees can take vacation, personal and sick time whenever, however and in whatever quantity they want - is getting a lot of air time these days and gaining cache as a benefit for "enlightened" workplaces.
Like all "new" reward ideas, unlimited vacation has its pros and cons. BLR's Daily Advisor recently did a nice series highlighting the benefits as well as the risks of this benefit, showcasing the advice of attorney Christina Gomez of Holland & Hart LLP.
The Benefits
Many of the benefits are obvious ones, and they are particularly attractive in today's economic and work climate. An unlimited vacation policy can be a boost to morale and a means to demonstrate the trust the organization has in its employees. It can provide an additional perk at little to no cost, and it can help foster workplace flexibility. Such a policy can also help create and reinforce a culture of mutual respect and responsibility. And, in a number of states, it can help the employer avoid the obligation to track vacation time on its balance sheet and pay out accrued and unused vacation at employee termination.
The Risks
Beyond the more apparent risks like the impact of staffing uncertainty on work planning/coverage and the potential for employee abuse, Gomez points out that an unlimited vacation policy also has the potential to be an obstacle (ironically enough) to employees taking the time off they need to refresh and recharge. Without a designated bucket of vacation time that they've formally earned, employees may not feel they can really take the time off. Or, they may perceive that "unlimited vacation" is really code for "no vacation", and that a benefit is - in fact - being taken away from them.
The Bottom Line
Like any reward policy change, unlimited vacation should not be implemented as a knee-jerk quick cultural fix or because the cool tech company down the road/in the news has put such a program in place. Like any reward policy change, it will be important to honestly assess the risks and benefits relative to your organization's particular culture and workplace environment - not only to ensure that the program is likely to deliver on its promise but also to ascertain the steps necessary to present it as a win in your employees' eyes.
Image courtesy of howtofindcheapvacationpackages.info
In theory it would be great for employees to work on more of an honor system where they take the vacation time they need without ignoring or shirking on work responsibilities. In our line of work, we know plenty of employees who don't use their vacation time that is offered to them. It would be great to see quality of life needs of employees met in this way, cool idea, not sure if it would really work across the board for all companies. Interesting read, I'm reposting on our Twitter feed @jpatrickjobs
Posted by: Elissa Jane Mastel | August 18, 2011 at 12:57 PM
Elissa:
Good points. While programs like unlimited vacation sound wonderful in theory, the important thing is to figure out how they would work in reality, in our own organizations. Thanks for the comment!
Posted by: Ann Bares | August 18, 2011 at 03:00 PM
A hundred hearts would be too few. To carry all my love for you. excellent and spot on!
Posted by: Forms | August 19, 2011 at 03:42 AM
It would be easy to assume that people would abuse this privilege, but companies may find that this isn't always the case. I know a couple of people who work in a company offering unlimited sick days, and none of them take more than four a year, surprisingly. It would take careful study and consideration and an understanding of employees' habits before implementing this.
Posted by: Susan | August 21, 2011 at 10:16 PM
How would you handle employees who have a lot of time off that they've accrued? Wouldn't they feel slighted if you instituted this policy? Would the company have to pay them for their vacation time?
Posted by: DG | August 23, 2011 at 09:51 AM
Susan:
Amen to your "it would take careful study and consideration and an understanding of employees' habits before implementing this" line - hopefully advice that people considering this benefit take to heart.
DG:
As Susan wisely notes above, any company considering this change will want to carefully study their employee group and their time off habits - and make a plan for transitioning, particularly if employees have large accruals in place - before proceeding. I am not an expert in this area, but I expect that a sound transition plan plan would indeed involve paying for some or all accruals in order to make employees "whole" before embarking on the new unlimited program.
Posted by: Ann Bares | August 31, 2011 at 07:01 AM