Unlimited Vacation Time? The Case For and Against

With spring break season rapidly approaching, vacation days and time-off requests are on the minds of many workers, including those in HR.

It’s easy to understand the appeal that unlimited vacation days offer, both from the perspective of a hiring manager competing for top talent and from a jobseeker yearning for opportunities to enjoy time outside the office. But daydreams aside, it’s hard not to wonder how these plans really work, and whether they are effective.

Here are a few key arguments for and against an unlimited vacation days policy.

For: Safeguards Against The Employee Burnout Crisis

Job burnout, described by researchers as a “prolonged response to chronic emotional and interpersonal stressors on the job,” is becoming a crisis for many businesses. Long hours and little time off can contribute to burnout, which can take a far greater and more insidious toll on workplace productivity than paid vacation time.

Against: Is Under-Utilized

An unlimited vacation days policy sounds like an open invite for the type of worker eager to exploit the system. Surprisingly, many companies offering this perk may find themselves facing a different problem altogether: employees not taking enough vacation time.

Such was the case at Kickstarter, which last year did away with its unlimited vacation days policy. The company feared burnout among its workers, who were reluctant to risk asking for more time off than their colleagues and as a result, rarely vacationed.

Kickstarter’s solution was to implement a clear, but still generous policy (25 days total vacation time) that helped employees better understand expectations concerning vacation time-frequency and duration.

For: Increases Employee Retention

As the team at Mammoth learned when their employer offered unlimited vacation time for a year, the policy goes a long way toward acknowledging workers as individuals.

Mammoth found that, on average, workers didn’t take any more time off than they did before the policy was implemented. Yet, they ranked it as their most valued benefit behind health insurance and a 401K — higher than vision, dental, or professional development.

Mammoth theorized that the value of the policy was in what it implied — a willingness to work with individuals, a sense of security (no need to “hoard” PTO in case of emergencies), and implicit confidence in worker’s abilities to manage their responsibilities effectively.

Against: Conflicts With American Work Culture

A study by consulting firm The Creative Group found that 76% of senior managers and 56% of employees said they would not take more time off even if their employer offered unlimited vacation days. Collectively, Americans fail to enjoy 429 million paid vacation days each year.

This stands in stark contrast to other developed countries like the UK and Sweden, where workers take as much as six weeks paid leave annually. Some workers say they’re “saving up” vacation time to spend in case of an emergency, while others simply fear the work which could accumulate after an extended absence. But it’s likely also in part a cultural issue, particularly in the startup world–a world which aims to attract competitive, even obsessive talent.

Our Take: Clarity is Key

The biggest determining factor in whether unlimited vacation day policies are successful seems to be clarity. Workers need to know how much time they can take off, how much time they are expected to take off, and how to request time off. This is true of any vacation day policy, whether it be unlimited, generous, or somewhere a little more average.

FingerCheck offers seamless, all in one employee time tracking and payroll solutions that allow employees to submit PTO requests and employers to approve them.