Unlimited Vacation - Not what it is cracked up to be.

No doubt you have read about American companies granting unlimited vacation time. A few years have passed and we have a better idea of how well this works.

The concept is simple. As long as your work is under control, you can take more leave than you could before.

The benefit to the employees seem obvious. Too obvious. However, it seems that a fixed allocation of leave often works better for most employees. Pilita Clark argues that unlimited vacation time ends up meaning more time in the office (CNBC). A US company, with offices in SA, introduced unlimited vacation time a couple of years back. Most employees continued to take their previous allocation while some took less than before. On average, employees took less vacation time than they did before the new policy.

The company has some other benefits to granting unlimited vacation. In the US, where vacation is not a right, they were able to reduce liabilities by writing off untaken leave. Remember, if you have unlimited vacation, you don't get paid out when you resign.

Some companies have gotten into the spirit of the policy. Kronos' CEO returned any savings from the policy back to the employees in improved benefits such as maternity leave. The result? Employees took, on average, 2.6 days more than they did before. Voluntary turnover decreased which indicates increased employee happiness. The company also turned out their best financial performance ever. (HBR)

The simple message is that unlimited vacation time only works if both company and employees embrace the spirit and intent of the policy. Managers need to grant leave fairly and complaints need to be considered. Employees may resent losing their accumulated leave value. Other long serving employees with higher leave entitlements than their colleagues, may resent that they are now all equal. Middle managers may find it harder to 'control' leave. People are entitled to their feelings and it is essential that they are listened to.

If you have any questions or want to chat about your career please email me.