Does your company offer unlimited vacation time? Are you thinking about it? The idea behind ‘unlimited vacation’ is to give your employees more freedom. Then they can take time off when they need it. Yet, it also ensures that the job gets done. As you might imagine, employees love this idea, but is it the right choice for the company?
Many of the top companies in the US have implemented an unlimited vacation policy. These include Netflix and Virgin. As an employer, however, you might not see how offering this benefit could be beneficial to the business. After all, if you are inundated with time off requests, who would be left to run the company?
Let’s look at some of the pros and cons of an unlimited vacation policy and how it might work for your business:
The Pros of an Unlimited Vacation Policy
Employees Will Be Happier
One of the main benefits of unlimited vacation policies is that your employees will be happier to be at work. A happy workforce naturally leads to higher production. In fact, research shows that employees who are happy at work are 12 to 20% more productive than their unhappy counterparts. This is even when turning in those time off requests.
If you allow your employees to have the freedom to choose when they take time off, you will quickly see that they also use the time to attend their kids’ soccer game or to get their annual check-up. As you can imagine, they will greatly appreciate this. Plus, you can take advantage of it, too.
These Policies are Great Recruitment Tools
Another benefit of unlimited vacation policies is that you can use them as a recruitment tool. The top talent out there is not only interested in your company. They are also interested in your competitors. Thus, it can be in your favor to offer benefits that candidates will not see from others companies.
Think about this: You give an offer to a top prospect. Your competitor gives them an identical offer in regards to salary. Which offer will they choose? Of course, they will choose the offer with the best benefits, right? Unlimited vacation, your benefit, is quite attractive to most.
It Prevents the Year-End Production Drought
As an HR professional, you likely know all too well that employees tend to save their vacation up until the end of the year. At that point, they must “use it or lose it.” When companies have these policies, they find that employees scramble to use this vacation time. This then leaves the company scrambling to keep up production.
When you have unlimited vacation, however, employees don’t feel the pressure of having to take their time off at the end of the year. After all, they would be free to take it whenever they like. This leads to the end of the year-end production drought.
The Cons of Unlimited Vacation Policies
Unlimited Vacation Time Might Not Be Fair
One of the main cons of offering unlimited vacation policies is that it might not be fair to all staff members. It’s difficult to ensure that all employees are given the chance to take time off. Everyone cannot be out at the same time.
However, it is possible to implement these plans with success. To do so, you must have a strong management staff who can juggle their team’s vacation schedule fairly. It must also be effective for production.
Employees Might End Up Taking Less Vacation Time
Another con of offering unlimited time off for employees is that some of them might end up taking less vacation time. What’s even worse, is that management rarely notices this. Since employees are not taking time off, they can naturally become burnt out. This, of course, leads to low productivity.
People tend to become overwhelmed when they have an unlimited resource, such as vacation time. They might not make decisions about when to take off, for instance. They also might feel apprehensive about taking their vacation. Some may even forget that they have vacation time available. They might also simply be unable to figure out how much vacation time to take.
To combat this, as an HR professional, you must make sure that there is a system in place to track this vacation time. Also, that management is actually tracking it. Additionally, you might have to introduce a policy where employees are reminded to take their vacation time, such as on their pay stubs.
Unlimited Vacation Policies Take a Lot of Communication
Finally, you will find that enacting unlimited vacation policies take a lot of communication. As an HR professional, this will largely fall on your shoulders. You might think that your staff will jump for joy because of this new policy, but in reality, they don’t want to cause problems.
Many companies that have introduced these policies have found that their employees are a bit suspicious. Why? Because they believe there is some sort of catch. Alternatively, they will think there is an unwritten rule that taking too much time is unacceptable. For example, if someone had 10 days of vacation time each year before the new policy, will management look down on them for taking 15 days the next year?
Managing these misunderstandings require constant communication from both the top down and from person to person. The days of simple vacation plans would be long gone, and you and your management staff will certainly have to add this task to your job description.
The bottom line is that unlimited vacation policies can work quite well. But, they also will present challenges that you and your staff might not be ready to face. Additionally, these policies are simply impossible to enact in some industries. Could a policy like this work in your company? There is only one way to find out. Give it a try.