Unlimited Vacation: How to Make It Work
by Open Work
Unlimited vacation is the hot new benefit at companies large and small, but many firms find it difficult to implement. We talked to five executives about how to make a policy that’s successful for everyone.
At OpenWork, we recently looked at the how the burgeoning workplace benefit of unlimited vacation is helping companies succeed and grow. The policy is far from the norm: A 2015 Society of Human Resources study found that only 1 percent of U.S. companies currently offer unlimited vacation, but it is certainly being considered more and more. In large part that’s because, as a 2016 SHRM article noted, “an unlimited-vacation policy can be an appealing recruiting and retention tool.”
The basic idea behind an unlimited vacation policy is straightforward. It gives employees more autonomy over their own needs, while eliminating the traditional time-accrual method that may seem archaic in the modern business world. (Nobody has ever come up with a good answer for the rationale behind having X-number of sick days. You’re either sick or you’re not, right?) But there is still the question of how to implement unlimited PTO and ensure that it benefits both employees and employer. We talked to five executives, from companies of varying sizes, who have embraced the policy. Each offered tips, nuances, unexpected benefits and tweaks they’ve discovered along the way.
1. Clarify the Policy
“We’ve had the unlimited paid time off policy for almost four years. After about two years, we realized there was some lingering confusion about what unlimited PTO meant, how to use it appropriately, etc. While employees were excited about the benefit, many of them were uncertain about how much vacation is too much so they were taking less. Our employees wanted help understanding how to balance those things, so we provided a FAQ document to clarify the practical side of the policy. It addresses issues like how much vacation to take at a time (typically, two weeks maximum), how to arrange that time off, etc. We found that providing this information in writing really helped them grasp the new concept and understand that taking time off doesn’t mean you’re abusing the system.
We see people using their PTO for varying reasons. Lately I’ve been using mine to accompany my teenaged children on college visits. While that’s fun in its own way, I confess some envy when I hear stories of the dream vacations some of my colleagues have taken — like one of our account executives who recently traveled to Costa Rica to plan his wedding. Vacations aside, unlimited PTO provides me the flexibility to attend their sports games and be there to help with hair and makeup every day during the school musical. I value having the time off to be part of those moments as much, or maybe even more, than I do the traditional vacations.
The unlimited policy has certainly eliminated the negotiations around PTO, and anything that makes hiring more efficient is a good thing!”
2. Trust Employees
Stephen Fean, VP of business and marketing, Watchdog Real Estate Project Management in Philadelphia
“We were founded in 2003, but didn’t finalize the policy until 2014. Of the three principles, I was the most skeptical. I figured people would abuse it, but that has not been the case. It’s been empowering because the policy respects their private lives. We call the policy ‘discretionary time off,’ which sounds a little less crazy and builds trust. Our hires from the corporate world are usually the most suspicious, but they adapt and find it empowering.
Everyone has access to everyone else’s Outlook calendar, and it hasn’t been a problem making sure vacations are covered for our clients. Our employees average three weeks a year, but we’ve found that it also works year-to-year. When people have gotten married and then go on honeymoons, it might end up being four or five weeks. The following year, they may take less vacation. Employees balance themselves out.
We also added a 30-day paid sabbatical after 12 years at Watchdog. Ideally, it will help us keep employees for life. Our president is going to be the first take his. He’s planning a big trip in 2018.”
3. Reward Vacations
“We shifted from an accrual-based, traditional program many years ago. We saved all of those earned hours for employees that were here during that time and shifted the individuals to the unlimited plan swiftly.
Our people average three weeks off a year, while not everyone always takes that much, we try to ensure they take at least one week off. To that end, Evernote offers $1,000 per year subsidy to spend on vacation and travel anywhere they choose. We don’t track usage, but we do know of employees who have been motivated to take international trips while others have been inspired to disconnect from the digital world in seclusion. Last year, two of 10 folks took two-plus weeks off at one time, while others chose to take two to three weeklong segments and long weekends. It is entirely a personal choice, so long as it’s coordinated with the respective manager and team, we fully support the diversity of choices.”
4. Communicate Effectively
“It starts with trust. Before anyone leaves for vacation, they draft a detailed ‘Vacation Memo’ for their backup and anyone else who might be involved with their clients or candidates. Our operations manager and I also receive a copy. All of our staff has access to our internal database, so anyone on our team can contact a client or candidate as needed. We ask for as much vacation notice as is reasonable, and we include a running list of upcoming vacation on our weekly staff meeting agenda so everyone is aware.
We lease office space from Carr Workplaces, an executive office suite company. They easily route calls from employee-to-employee. Staff members also set up out-of-office notifications listing the name and contact information of the person who is covering for them. It’s seamless.”
5. Delegate and Innovate
“While this is a great recruiting tool, the unlimited vacation concept was born out of our need to try to give people the ability to work less, work more efficiently, while still getting more done. In a perfect world, we ask that our people give us a two-week notice, but recently our director of user experience had a last-minute three-week London trip come up. We had less than a week’s notice and lot of deadlines. He went on the trip, but worked a few hours a day in order to ensure we kept our deadline. He also delegated some of the work to a few contractors in order to get the work done.
We take Wednesdays as a day off. We chose that day so people have a nice break in the middle of the week to refresh. The idea actually started because we had a part-time employee who was able to work every day except for Wednesday. This was when we were a much smaller team. Since she wasn’t there on Wednesdays, the rest of us started not coming in. As time went on, she became available but we kept the rule the same. What we’ve found is people tend to still work Wednesdays (even if it’s just for an hour or two) maybe to catch up on work or get ahead. The freedom of knowing that they don’t have to work is what they enjoy the most. And yes, our people still get comparable pay.
Like all workplace benefits and innovations, unlimited PTO isn’t a magical, one-size-fits-all solution. The most important thing is for corporate leaders and HR professionals to continue monitoring, communicating with employees, and adjusting as necessary to make sure the program is working for everyone.