Unlimited Paid Time Off

The Monkey See Monkey Do of Startups

There’s a fallacy where you see wealthy people driving around in nice cars and living in nice houses. You want that lifestyle, so you stretch your budget and get a large house and a Maserati Ghibli. These things don’t end up making you wealthy. In fact, you might be further away from your lifestyle goal.

In 2009 Netflix released their Freedom and Responsibility slide deck. I think the general take-away was “Netflix has unlimited vacation” and startups started to follow suit. It’s almost unheard of to find a startup that does not have an unlimited vacation policy.

Unlimited Vacation is the wrong take-away. Having it doesn’t make you a high-functioning workplace, like Netflix. Yet, so many startups adopt this policy, but don’t have same culture of “Freedom and Responsibility” to support this. Now’s a good time to (re-)read the slide deck.

I don’t think every company needs to adopt the same culture of Netflix. It’s a nice ideal, but it might not work in every situation. What is important is context.

Founders taking plenty of vacation is a great example. Managers encouraging people to take vacation is also great. At a previous company, one manager explicitly set the expectation that people should be taking (at least) four weeks of vacation.

Without this context — unlimited can easily mean never. Many startup employees sacrifice physical and mental health without taking a few days to recover. How is that even good for the bottom line?

Another way to establish context (or intent) is establishing minimums. Travis CI recently did this and the reason why is specifically for the lack of context.

Netflix again made waves with an unlimited parental leave policy. There’s been an interesting discussion about this on Hacker News. The discussion touches more on unlimited PTO than leave. This is great for a few reasons: it’s the same for all parents. It treats leave as separate from PTO at a place that doesn’t track either. You literally could leave for the better part of a year if that’s what you wanted to do.

I imagine we’ll see a lot of larger tech companies adopting something similar. However, without context this can end up being on the books, but frowned upon by peers and managers. Don’t just buy the Maserati of unlimited vacation and unlimited parental leave. Create the culture that can support and sustain it.