Should You Offer Employees Unlimited Vacation?

by David Creelman | Posted | Total Rewards

Should You Offer Employees Unlimited Vacation?

Why should your organization consider the option of an unlimited vacation program? This is a great question for HR pros because it starts with a strong emotional response; people will automatically think that it's either a wonderful idea or a terrible idea. Your job as an HR professional, especially if you specialize in rewards, is to be able to step back from the emotion, and outline the issue in a dispassionate way.

First, what is the vision?

When someone suggests a policy of unlimited vacation do they mean employees can just go to France for the rest of the year while collecting a paycheck? No, obviously not. It's not really unlimited vacation so much as flexible vacation periods. You might even want to refer to it in those terms to avoid misunderstanding.

This encompasses two main scenarios:

  • A salaried employee who has gone above and beyond could take more vacation than would be allowed under traditional vacation policies.
  • An employee needs extra vacation for special circumstances, such as illness or injury in the family.

When you bring real scenarios into consideration, you get past the initial emotion and move onto the practical questions of how to do this.

Second, how would we do this?

The concept of unlimited vacation, or flexible vacation periods, embraces the idea that you trust the employee to use the option responsibly. Rather than having to get vacation time formally approved, it's assumed to be okay unless their manager has good reason. The starting point is respect for colleagues and workflow. The employee can discuss time off with their manager (rather than simply disappear). The manager should generally lean towards giving the employee their full support, even if the employee's time away makes the manager's job a bit harder for that time.

The more difficult issue is how to handle a dispute between an employee and their manager. If an employee wants to take a flex vacation period and the manager denies the request, how is that resolved? Whether the request was denied based on workflow needs or due to potential abuse of the policy, HR is likely going to have the authority to reach a resolution. A decision would be made after consulting all parties. In the end, it's a judgement call. If HR isn't comfortable making a judgement, as opposed to just applying a hard and fast rule, then maybe the company needs a stronger HR function.

What could go wrong and how would we deal with it?

While it's smart to consider what could go wrong, if you like the sound of a flex vacation policy, run a pilot program. Use the pilot to learn what isn't working, rather than trying to regulate all imaginable problems in advance. A number of businesses have implemented unlimited vacation policies in ways that prevent problems from arising. Many fears about flex vacation may be unfounded, but it's important to have things well-planned.

Here's a list of a few potential problems:

  • Problem: Some employees think two weeks of vacation is normal, but they can take more if needed. Others think five weeks is normal.
  • Mitigation: Set expectations for what is normal.
  • Problem: An employee abuses the policy.
  • Mitigation: The manager should raise their concerns with HR and, if the employee is abusing the policy, HR can take appropriate action.
  • Problem: There are so many disputes it becomes unmanageable.
  • Mitigation: Good communication and clear guidelines should pre-empt the disputes. If not, you may have to abandon the policy.
  • Problem: Managers and employees feel uncomfortable with the lack of clear rules.
  • Mitigation: Try communication and education. In some cases, if it's a deep cultural trait, it may be best to abandon the policy.

Why would you try flex vacation if it can cause problems?

You should try it when it seems to make sense for your organization. Many professionals are working remotely or getting things done outside traditional 9-to-5 hours, so when work is flexible, it can make sense to do the same with vacation.

Today's professionals live in a results-only work environment, even if it is not officially recognized as such. Managers can't effectively monitor what a knowledge worker is doing minute-by-minute the way you can monitor a waiter or factory worker. Since you can't monitor their activity in a meaningful way, you need to monitor their results. And if you're monitoring results, then you don't care how many vacation days they take if the work gets done. You may not even know they're on vacation: Is that time in France a vacation or simply a good location to crank out work?

Bottom line?

In today's world, where many workers are virtual and managers monitor output rather than activity, unlimited, or flex, vacation feels natural. These workers don't need to sign out for a vacation any more than they need to sign out to grab a coffee. Going to a flex vacation policy may sound radical, but it will likely go unnoticed since so many organizations already function this way.

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