What’s the Deal with Unlimited Vacation Policies?

By: Emma Hickey

In 2015, as publications like Time Magazine and The Washington Post were praising the trendy unlimited vacation policies popping up at companies like HubSpot and Netflix, Kickstarter decided to eliminate theirs. What started out as a Silicon Valley perk slowly spread beyond the tech industry and to other cities in the US. So why did Kickstarter, a young Brooklyn-based crowdfunding platform that checks off all the boxes of a hip millennial startup, decide to get rid of one of the most attractive startup perks? Because they don’t believe it benefits their employees.  

As we roll into July, one of the most popular months for American workers to use vacation time, employers must reckon with their own vacation policies. How are their employees interacting with them? Are they taking too much time off, or not enough time at all? Does an unlimited or take-what-you-need vacation policy empower a team to take time off, or does it limit them? Now that unlimited vacation policies have made their way into many companies, both large and small, nationwide, these are the questions that need considering.

One thing is for sure: Americans don’t take enough vacation time. Chalk it up to an unshakeable Protestant work ethic or the innate capitalism of the American dream, but as compared to other developed countries, Americans are lacking when it comes to time off. The Center for Economic and Policy Research released a study in 2013 that analyzed the vacation policies of 21 rich countries (France, United Kingdom, Austria, Norway, Denmark, Finland, Sweden, Portugal, Spain, Italy, Belgium, Germany, New Zealand, Ireland, Australia, Greece, Netherlands, Switzerland, Canada, Japan and the United States) and found that the US is the only advanced economy in the world that doesn’t guarantee paid time off. Co-author of the report, economist John Schmitt, writes of the US that “relying on businesses to voluntarily provide paid leave just hasn’t worked.”

Even when companies do offer paid vacation time, many employees don’t take it, citing that they feel guilty over taking time off from work, or that they simply have too much work to do to justify a vacation—a skewed perception considering having “too much work” is a reason in and of itself to take a vacation. A 2014 Glassdoor survey found that the average American only uses half of their allotted vacation time. This is the problem unlimited vacation policies seek to address. By making vacation unlimited, employers hope employees will feel encouraged to take time off. There are other motives behind such a policy as well, though, that have nothing to do with giving employees time off from their jobs.

Nathan Christensen, the CEO of MammothHR, wrote an article for Fast Company in 2015 about his company’s choice to implement an unlimited vacation policy. What he found was quite similar to what other companies with unlimited vacation policies have realized—his employes took roughly the same amount of days off as they took under a limited vacation policy. Christensen writes that he came to understand unlimited vacation policies are less about getting your team to take off more days, and more about the message an unlimited vacation policy conveys to your team. He outlines three main learnings about unlimited vacation policies:

  • “First, offering unlimited vacation communicates that a company views its staff holistically–acknowledging that employees have demands and interests beyond work that can’t always be scheduled in advance. 
  • Second, unlimited vacation policies convey trust, making employees–not their managers or HR directors–responsible for making sure their tasks and projects still get done regardless of the time they take away from the office.
  • Third, unlimited vacation treats employees as individuals. Time off is a personal issue.”

It’s important to have policies in place that garner goodwill from your team, and that’s exactly what an unlimited vacation policy does. What it does not do, however, is actually encourage your team to take more time off, and that’s unfortunate considering its a significant issue plaguing American workers. 

Unlimited vacation policies offer something to your team in terms of conveying a particular message, but they do not solve the problem of American workers not taking enough vacation time and burning themselves out. This is why Kickstarter eliminated their policy. Employees there now have a fixed 25 vacation days. Buzzfeed News reported on Kickstarter’s thought process in making this decision, writing “Kickstarter's human resources team felt that providing clearer guidelines would help employees get a better sense of how much leisure time versus work time is right.” It seems to be working for them—nearly 4 years later, Kickstarter has stuck with their 25 day vacation policy. 

Unlimited vacation policies prey on the “always be working” mentality that’s already so prevalent at startups. While it’s well-intentioned, it can turn people into work martyrs who never take time off in order to show extreme dedication to their company and to their role. This inevitably backfires as people don’t have time to rest and recharge. Kickstarter seems to have found a better solution to preventing burnout than companies with unlimited vacation policies by creating a limited amount of vacation days that people feel belong to them and don’t feel guilty for using. Rather than hopping on board with unlimited vacation days, companies might consider switching to a limited amount of vacation time that’s generous. That way their employees will actually take time off, rest, recharge and come back to work renewed.

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