I continue to hear more conversation about unlimited vacation time. It makes me wonder if having a defined vacation benefit is an old-school concept.
Unlimited vacation (or unlimited PTO) isn’t a license to not get the work done. Whether the company has a formal vacation benefit or not, the work still must get done. The concept of unlimited vacation is focused on trust, transparency, and employee engagement. Today’s employees want flexibility and unlimited vacation gives them the opportunity to take advantage of new and exciting things, while at the same time, achieve their professional goals.
It’s also important to note that unlimited vacation isn’t a cost-cutting measure. Yes, moving to unlimited vacation means that those big vacation accruals are gone. But smart companies are shifting those funds toward other benefits like wellness programs, student loan repayment programs, and parental leave (just to name a few.) With the increased challenges to finding qualified candidates, unlimited vacation could create a win-win.
But before implementing an unlimited vacation policy, here are six things to consider:
- Train managers on how to evaluate operational coverage. The key to successfully implementing an unlimited vacation program is managers being able to understand how much coverage they need to run their departments. Unlimited vacation doesn’t come without an approval process.
- Determine what will happen with existing vacation accruals. Employees with an existing bank of vacation will want to know what’s going to happen to their existing vacation time. Be prepared to answer the question upfront.
- Get the buy-in of employees with seniority. Some employees might view vacation as a rite of passage. You know, “the new hire shouldn’t get the same amount of time off…they need to earn it.” Organizations will want to be prepared with a response. Tell employees why the policy was implemented and how it benefits everyone.
- Consider having focus groups after the policy is announced. This is just a good practice regardless. No matter how much companies try to make everyone happy and implement a change without mistakes, stuff happens. Employees will vent their frustration. Give them a forum to provide feedback. They might have some good ideas to share.
- Train managers on how to hold employees accountable. Managers need to be comfortable telling employees they can’t take vacation and the reason. Unlimited PTO doesn’t mean every request is rubber stamped. Train managers on the best way to discuss time off requests with employees.
- Monitor actual time-off requests. Unlimited vacation doesn’t mean organizations can abdicate from monitoring time off. Employees still need to take vacation. Managers need to make sure that employees refresh and recharge.
Finally, in case you’re wondering – unlimited vacation policies don’t automatically mean employees take more time off. They can be a real win for organizations and employees. Organizations can offer employees work flexibility. Employees can take advantage of opportunities. But they do take some planning, training, and communication.
Image captured by Sharlyn Lauby while on (limited) vacation in Mexico3
Joyce Maroney says
We made this change at Kronos in the last year. While there were employee and manager concerns at the beginning, this has worked well for us. Making this change means the manager can’t rely on a one size fits all policy, but rather needs to have more specific conversations with each employee about time off vs. how work will get done.
Sharlyn Lauby says
Thanks for sharing Joyce. I think a lot of companies want to explore this and are looking for best practices to guide the way.
Rose Andreottola says
I’ve had my eye on this topic for a while and now trying to implement at my current employer. I’m curious as to how it’s managed with multi-state employees and all the mandated paid sick leave laws, particularly year-end cash-out provisions?
Interesting article – and some interesting points raised here. In particular, as you say, trust is crucial, as is successfully hitting individual/organisation goals & objectives. The point you make about the perceived flexibility not always meaning that employees will take sufficient leave is also a good one and something that organisations and their employees need to be aware of, for better or for worse.