Unlimited Vacation for Employees: Does It Really Work?

Business.com / HR Solutions / Last Modified: February 22, 2017

Corporate businesses are beginning to offer the most attractive perk yet: unlimited vacation. But, does it actually work?

If you spend your time counting and rationing your vacation days, wondering if you’ll have enough to make it through the year’s end, you’ve probably considered about what it would be like to have more vacation days to use in the first place.

You’ve also probably been in the scenario where an employee tries to negotiate a few extra days, or to pull from next year’s vacation for unexpected situations that arise.

What if instead of having to carefully ration your days or negotiate days with your employees, you could offer something completely different? What if you could provide unlimited vacation days? Think it sounds foolish? Don’t jump to that conclusion too soon—other corporate giants have begun to offer exactly that to their employees and have seen tangible benefits as a result.

Richard Branson Takes the Leap

In September of 2014, Richard Branson, founder of The Virgin Group, announced that staffers at the U.S. and U.K. headquarters of Virgin would receive unlimited vacation time.

Branson noted his inspiration came from a similar policy at Netflix which began in 2010, but these are not the only companies making the leap: Startups Foursquare and Tumblr offer similar policies for certain employees.

Branson decided that the amount of work completed was a better benchmark of success than the number of hours worked. The one caveat behind the offering? Employees may only take off “when they feel 100 percent comfortable that they are and their team are up to date on every project and that their absence will not in any way damage the business—or, for that matter, their careers,” according to his explanation in The Virgin Way.

Combining professional responsibility with the fact that 60 percent of employees do work while on vacation anyway, the policy seems to be working well for these and other businesses that have decided to move in this direction. Here’s why it could work for your company as well.

Related Article: Richard Branson on Why Patents Kill Innovation

It Increases Productivity

To offer unlimited vacation, you must trust your employees. This should be a given from the start, assumed prior to any vacation policy being put into place. Provided you’ve hired responsible employees that care about your brand and their futures, offering unlimited vacation could increase job satisfaction.

Beachgoers also benefit from lower levels of cortisol, a stress hormone, from the effect of beach sounds on brain chemistry. Both increased job satisfaction and reduced stress would increase productivity in the long run.

Employees who are happy with their working environments tend to be 12 percent more productive. Those who are unhappy tend to be 10 percent less productive. Because only 13 percent of employees feel engaged and satisfied in their working environments, there’s definitely room to make a difference. Offering unlimited vacation could be the first step toward making this happen.

Unlimited Vacation Reduces End of the Year Chaos

Here’s a standard professional scenario: Employees are given a certain number of vacation days each year. These days must be used or they will be lost. Throughout the year, the employee doesn’t find time to use the pre-granted vacation days. The last month of the year begins, and the employee decides to use vacation time rather than lose it.

The problem with this scenario is that it doesn’t pertain to a single employee. Instead, many employees find themselves in this situation. This often leaves employers understaffed and productivity levels at a year-long low. At the same time, employees are often left settling for mediocre vacations that don’t allow them to feel refreshed, they’re just days off to use rather than lose.

Unlimited vacation prevents this scenario by allowing employees to take time when it’s right for them, instead of “just because.” It also keeps the end of the year production at the same levels as the rest of the year.

Related Article: Your Employees Are Scared To Take Vacation. Fix That!

It Could Attract Top-of-the-Line Employees

When recruiting new employees to fill existing or new positions, you’re looking for the best of the best, those that will help your company meet and exceed its goals. A “secret” that many employers forget is that top-of-the-line benefits attract top-of-the-line employees.

Your target employees may be happily employed elsewhere. Their resumes may never come across your desk. But if you can offer something that their current employers cannot, you may have an edge.

Along with benefits, pay, raises and bonuses, PTO and vacation days are among the top concerns of many prospective employees. If you’re able to offer unlimited vacation, you could bring in talent that you’ve never been able to recruit in the past—a direct benefit for your company.

Preventing Problems With Unlimited Vacation Policies

There are many benefits to offering unlimited vacation days. However, there could also be downfalls: employees taking advantage, work being left uncompleted or more. To prevent these, consider the following limitations:

  • Explaining the policy in detail. Throwing out the idea that employees can take off whenever they feel like it, without any regulations in place, could spell trouble.
  • Monitoring all days. Unlimited doesn’t mean it has to be a free-for-all. Track all vacation days that are used and let employees know that you’ll be doing so.
  • Provide guidelines. Just like Branson, inform employees that taking off during large projects that depend upon them or when an important deadline is approaching could lead to negative consequences.
  • Set and track goals. Make sure that you meet with all employees regularly to set and track goals. If an employee is falling short, discuss what could be behind the situation. If it relates to time off, make suggestions for improvement.

While the trend of unlimited vacation days is just beginning, the benefits are numerous, especially when safeguards are put in place from the beginning. Ready to take the leap? Follow the lead of other top companies and startups and think about how it could benefit your employees and company.

Login to Business.com

Login with Your Account
Forgot Password?
New to Business.com? Join for Free

Join Business.com

Sign Up with Your Social Account
Create an Account
Sign In

Use of this website constitutes acceptance of the Terms of Use, Community Guidelines, and Privacy Policy.

Reset Your Password

Enter your email address and we'll send you an email with a link to reset your password.

Cancel