Unlimited Vacation Policies Are on the Rise: These Companies Aren't Counting Your Days Off

The unlimited vacation trend is starting to sweep the nation. Here are a few high profile companies experimenting with long, long days at the beach.
By Eric Reed ,

Americans don’t take time off.

We’re proud of it. We brag to one another about who had to work late. We compare notes about whose Saturday the boss took over.

Yes, it’s a hardcore humblebrag, but it’s also the best coping mechanism we’ve got, because those endless stories about workaholic Americans all ignore one lazy fact: few people have any choice in the matter. Everyone has to answer to someone, and that someone is usually pointing at the clock while looking at the bottom line.

Lately, however, a few companies have begun pushing back. A small but growing number of firms across the country have begun to embrace a trend pioneered by Silicon Valley: unlimited vacation. It is the Cadillac of benefits and blows the doors off of America’s traditional two weeks a year.

But does it work? The results are mixed.

While some companies have begun to swear by this idea as a means of professional empowerment, others have watched it have exactly the opposite effect. Companies such as the Chicago Tribune have rolled back unlimited vacation policies after watching people actually spend more time at work as a result. 

As Glassdoor analyst and employment expert Rusty Reuff explained, unlimited vacation policies can work but require just the right circumstances.

“The companies that do provide that unlimited vacation, they will be one of two things," he said. "Either they will be extraordinarily naïve and they’re just doing it because they don’t know any better. Or it’s a company like Netflix and some others that are extraordinarily good at managing work.”

The problem, according to Chicago employment attorney Kendra Kutko boils down to one of culture. Without a fixed benefit, employees have no objective metric for how much is too much time off. Instead they rely on what coworkers and, more importantly, bosses do. Culture counts.

And that’s particularly important in America, where even employees with fixed expectations tend to take less than their allotted time off.

Although everyone interviewed for this piece agreed that companies don’t intentionally try to create impossible vacation policies, they also agreed that employers don’t always use these policies responsibly. Figuring out how to make this work is a growing issue though, now that as many as 1% of employers have gotten on board. So who are some of the high profile companies who don’t (on paper) care how much time you spend at the beach?

Netflix

There are far too many companies offering unlimited time off to enumerate completely, although it still remains uncommon. In fact, most Americans still get no time off paid or otherwise.

Netflix, the service that pioneered sucking your Thursday nights into a vortex of forgotten TV and stale Ho Hos, was one of the pioneers. As CEO Reed Hastings told CNBC recently, he takes six weeks of vacation per year and hopes his employees do the same. 

Of course, it’s remarkably easy to talk about finding zen on the mountainside when you sign the checks and, coming from someone in Hastings’s position, a little bit like offering free Ferrari waxings in the parking lot.

Still, Netflix’s CEO articulated the most optimistic vision for unlimited vacation: a bargain of trust and professionalism between the employee and employer. At their best these policies envision an office of colleagues, where workers take pride in a job done well and feel free to take the rest of their time to rest, recharge and refresh. The new trend: "Beach Vacation and Chill."

Groupon

This Chicago-based company didn’t just pioneer new ways to try a restaurant once then never go back, it also gives its own employees plenty of time to do the same. More importantly, based on the rave reviews Groupon’s own employees give, it has clearly managed to build the social capital necessary to make this policy work.

“Even if they have a general sense of the corporate policies and the rules that guide them, [employees] are not going to make their decisions by turning to the corporate handbook,” Kutko said. “These policies may aim to try and change some of the corporate culture that kind of frowns on people taking a lot of time off, but whether they’re actually going to be effective is going to depend on the particular culture of the organization.”

So how does Groupon do on culture? “Pros,” reads a typical review of the working conditions. “Unlimited vacation days – enough said.”

It’s tough to argue with results.

Kickstarter

Not every company has such a positive experience. Although Kickstarter declined to comment for this article, earlier this year the company decided to roll back a flexible vacation policy in favor of one capped at 25 days per year.

With the opportunity to take their own Grandes Vacances every year, the company’s employees aren’t exactly hurting under the new regime.

According to a Buzzfeed article, Kickstarter found that setting specific parameters allowed employees clear direction on “how much time was appropriate to take from work to engage in personal, creative and family activities.” Setting aside the vaguely dystopian overtones of assigning how much time the company feels is appropriate to spend with your family, Kickstarter has experienced the other side of unlimited vacation. When there are no maximums there are no minimums, and there’s always someone else willing to show you up by working an extra eight hours…

Big Law

No one knows that problem like someone living the paper chase.

Lawyers live and die by the billable hour. It’s how money is made, bonuses are met and output tracked. Law firms set their expectations by the clock and over the years many, such as global firm Kirkland and Ellis, have experimented with the generous-on-paper policy of unlimited vacation once hours have been met. Unfortunately, as Above the Law editor Joe Patrice pointed out, in the cutthroat environment of a major law firm there’s just no room for someone to say “I feel like I’ve done enough.”

“It becomes somewhat of a loser,” he said, “because you usually are working on time sensitive matters that require more or less constant attention, which means you tend to not have an opportunity to use anywhere near [allowed your vacation].”

“I think they all know, the kind of gun to your head honesty, they all know they’re setting the associates up for failure, because [those associates] just won’t be able to use it, but I think their intention is towards honesty,” Patrice added.

Zynga

O.K., yes, this is the company responsible for those endless Facebook requests to water your friends’ plants. And yes, this a company well-known for taking off other designers’ ideas and reskinning the results as “new” games.

But take heart: at least Zynga isn’t such a terrible place to work. The company, too, allows unlimited vacation packages.

Whether or not this is a real benefit, however, remains in dispute, as respondents to a Quora forum argued that “it’s a recruiting tool that has very little benefit to the employee in reality.”

Ask.Com

Verbiage aside, it turns out there are search engines online aside from Google. One of them even lets employees step out from behind the monitors for as many days a year as they’d like.

According to Ask.Com, this isn’t even just a benefit for the employee. The company profits too, freeing up as many as 52 hours per year by not managing an internal paid time off (PTO) system, hours it dedicates to recruitment and retention. And certainly, from a micromanagement perspective, there’s much to be said about the labor saving impact of not having to track which employees have used which days.

There are direct savings too. If you live in one of the approximately 17 states that requires employers to pay out for unused vacation days, switching to an untracked system is a huge win for the employer.

The Motley Fool

This high-profile financial news website with financial coverage has joined the unlimited vacation bandwagon.

Yes, even the world of financial coverage has realized that unlimited vacation days work wonders when it comes to staff morale and productivity, for companies that can do it right. Pulling off a successful policy of untracked PTO is difficult and requires a huge investment in the kind of company culture that emphasizes professionalism over petty scorekeeping. Management teams that pull it off rave about the impact it has on employees at every level, including recruitment.

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