Unlimited Vacation is a Gimmick

You know it. I know it. Your employees know it. So what are you going to do about it?

This does not exist.

Netflix.

Grubhub.

LinkedIn.

Evernote. Virgin. Hubspot.

Even General Electric has jumped on the bandwagon, deciding to offer employees unlimited vacation.

These days, unlimited vacation is being touted as the perk to offer employees.

So it’s worth asking: who really benefits from that policy?

In the USA, the #NoVacationNation, full-time employees get an average of 8.1 vacation days after a year on the job, and only 15.7 after 25 years.

Our European counterparts are given 20–30 days per year. And they like to rub it in. Who among us isn’t jealous of their quality of life?

This disparity may be killing us, too. According to Gallup, depression costs US workplaces $23 billion annually, and I think we can all agree that eight vacation days a year is enough to send anyone into a depression—regardless of how much you like your job, your colleagues, or the free trail mix in the kitchen.

Unlimited vacation isn’t really unlimited.

Let’s get real.

Employees know that management can deny requests to take working days off, but that doesn’t stop the company from touting the cool factor.

Advantage: employers.

It’s not even the elephant in the room

Unlimited vacation isn’t necessarily more expensive.

Remember when you left that job and you hadn’t taken all your vacation days? When you received your final paycheck, you likely would have been paid out for vacation days that you hadn’t taken. But unlimited vacation means employees don’t accrue vacation days as they would have in the past, which means there’s less financial responsibility for employers.

Advantage: employers.

But maybe it boosts productivity?

If the offer of unlimited vacation is taken at face value, then companies are signaling that trust their employees’ decision-making skills. Which would make employees happy. Which may raise their productivity by up to 12%, according to at least one study. So by the transitive property, unlimited vacation *may* increase productivity.

That said, if employees don’t take vacation, then the offer of unlimited vacation is a chimera.

Bottom line: Don’t over-promise and under-deliver. If you’re offering unlimited vacation, you need to follow through on your promise by monitoring employee productivity and happiness, and then managing towards a better state.

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