The concept of unlimited vacation – an arrangement where employees can take vacation, personal and sick time whenever, however and in whatever quantity they want – is getting a lot of air time these days and gaining cache as a benefit for “enlightened” workplaces.
Like all “new” reward ideas, unlimited vacation has its pros and cons. BLR’s Daily Advisor recently did a nice series highlighting the benefits as well as the risks of this benefit, showcasing the advice of attorney Christina Gomez of Holland & Hart LLP.
The Benefits
Many of the benefits are obvious ones, and they are particularly attractive in today’s economic and work climate.
An unlimited vacation policy can be a boost to morale and a means to demonstrate the trust the organization has in its employees. It can provide an additional perk at little to no cost, and it can help foster workplace flexibility. Such a policy can also help create and reinforce a culture of mutual respect and responsibility.
And in a number of states, it can help the employer avoid the obligation to track vacation time on its balance sheet and pay out accrued and unused vacation at employee termination.
The Risks
Beyond the more apparent risks like the impact of staffing uncertainty on work planning/coverage and the potential for employee abuse, Gomez points out that an unlimited vacation policy also has the potential to be an obstacle (ironically enough) to employees taking the time off they need to refresh and recharge.
Without a designated bucket of vacation time that they’ve formally earned, employees may not feel they can really take the time off. Or, they may perceive that “unlimited vacation” is really code for “no vacation,” and that a benefit is – in fact – being taken away from them.
The Bottom Line
Like any reward policy change, unlimited vacation should not be implemented as a knee-jerk quick cultural fix or because the cool tech company down the road/in the news has put such a program in place.
Like any reward policy change, it will be important to honestly assess the risks and benefits relative to your organization’s particular culture and workplace environment – not only to ensure that the program is likely to deliver on its promise but also to ascertain the steps necessary to present it as a win in your employees’ eyes.
This was originally published on Ann Bares’ Compensation Force blog.