The Myth Of The Unlimited Vacation Policy

“I took 3 months off from my job last year because my employer has an unlimited vacation plan!” — No One

There are so many health benefits to taking vacations or staycations it’s a wonder why Americans still don’t take as many as other parts of the world. We all have our reasons for not doing so. Financial situations certainly inhibit it. Hourly workers usually don’t get paid for vacation days. Kids in school make scheduling a challenge. We only get so many vacation days a year. Wait a second. You, CEO-person, can fix that. Institute an unlimited vacation policy!

You’ve heard of them, right? It’s the amazing company perk allowing employees to take paid time off whenever employees want. Want to go on a week-long cruise? Unlimited vacation policy! Want to take a month to learn how to sail a boat? Unlimited vacation policy! Want to spend a quarter of the year searching for lost treasure on the coast of Lilliput? Unlimited vacation policy!

It’s an unbelievable benefit. You can take unlimited vacation!

When I was at Gilt Groupe, we had an unlimited vacation policy or, more specifically, a no vacation policy policy. The origins of the policy are unknown but one rumor traced its ancestral roots to management not wanting to track vacation days. An unlimited vacation policy is certainly better than its estranged and annoying cousin, no vacation policy. But, did it do all the things vacations are supposed to do when we say vacations are healthy?

It worked for recruiting. The aspirational possibility of not having constraints around vacation days was an easy pitch to candidates.

But once a candidate became an employee, the benefits attached to vacation days got complicated. The policy inspired flexibility, less bureaucracy, and trustworthiness. But in a straw poll, we found we were taking less vacation days than our friends in similar positions at similar companies that had stated vacation policies. Why weren’t we taking unlimited vacation?

  1. We took as much vacation as our peers and our leadership. If your manager took one week of vacation a year, you were unlikely to take three weeks of vacation.
  2. The less aggressive you were, the less likely you were to ask your boss for vacation time.
  3. If someone was aggressive enough to ask for three weeks continuous vacation, their boss didn’t have support to push back if needed. The boss would look appear as a jerk if she declined the request.
  4. We wasted so much time talking about vacation time.

A lot of the problems surfaced as a result of not having a policy that managed expectations for both the managers and the direct reports. It pinned managers and direct reports against each other. And, it resulted in bad conversations about whether people deserved to take vacations. It just didn’t feel good.

When I started managing at Gilt, I instituted a rule that everyone reporting to me had to take one week of vacation every quarter. I realized some people were unlikely to ask for vacations because it wasn’t clear what the expectations were. Since an unlimited vacation policy is up to interpretation, I made my own interpretation and instituted it so everyone felt like they had fair ownership over their health and well-being.

So, you have to track vacation days. And, I think you should make sure your employees take vacation every year.

Which leads me to my current belief that my ideal vacation policy would be a vacation policy range. The minimum is the smallest number of days you must take in a year, because it’s good for your health. And the maximum is the most you are allowed to take, because it’s important you contribute to the organization. You must take any number of days between the range.

Don’t get me wrong. I would still love to take three months off to search for Lilliput. But I think I’d be happier knowing my employees are going to be able to deliver their best work. And, I’d certainly be happy knowing I would have time available to read Gulliver’s Travels.


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If you liked this piece, you may also like reading Stop Whiteboarding.