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Photograph by Getty Images/Blend Images

Here’s why unlimited vacation may be too good to be true

Oct 03, 2015

Unlimited vacation sounds like an amazing perk. You could earn a living, yet take all of August off like the Europeans, right?

The reality is somewhat different.

BuzzFeed News reported recently that crowdfunding site Kickstarter was nixing its unlimited vacation policy, in part because employees were unsure how much vacation was okay to take. Now its workers will get 25 days per year.

Kickstarter discovered the hard way that an unlimited vacation policy doesn’t always work—but not for the reason most people would think. The company changed its policy because employees were underutilizing the benefit, and potentially risking burnout.

So can an unlimited vacation policy work?

“The tech startup scene keeps elevating the bar of perks that are almost expected,” says Rebecca Price, SVP of people at SailThru, which makes marketing tools and offers employees unlimited vacation (though anything more than 10 consecutive days goes unpaid). Generous time off, she says, “goes with free food in the kitchen.”

On a more fundamental level, though, relaxed vacation policies stem from cultures that pride themselves on different ways of doing business. “Our metrics aren’t about the hours people are in the office, who’s coming in first and who’s leaving late at night,” says Price. She aims to bring in people who “know how to manage their time,” and if employees can work mostly when and where they wish, as long as they get the work done, then she says they can decide when and how to take vacation.

That sounds like it makes sense, but the problem is that many of the companies that adopt flexible vacation policies are full of competitive, driven people. Particularly in startups, employees play many roles, which means that getting coverage for longer vacations involves asking a lot from co-workers who are probably overworked too.

“‘Unlimited’ time off is certainly an eye-catching benefit, but it always begs the question of what its typical use will be at a particular company,” says Jennifer Owens, editorial director of Working Mother magazine, which studies leave policies at various companies. “Just try taking a month of paid vacation and see how that flies.” The upside of set vacation days is that “the concept of what’s acceptable is established.” Without those norms, however, employees may take fewer days “as they choose to err on the conservative side.”

“We’ve had the exact same problem Kickstarter has,” says Simon Berg, CEO of interactive content marketing software maker Ceros. Employees there get unlimited vacation, but Berg reports that a recent in-house survey found a majority of them were unclear on how much was okay. “If we take time off, we feel guilty,” they said. Berg isn’t ready to change the policy yet and believes there has to be a way to make it work, but he does note the irony that instead of everyone constantly taking off for the beach, “the exact opposite happened.”

To make an unlimited vacation policy work, managers need to lead by example. Berg (who admits he doesn’t do vacation well) says a “very wise CEO” once answered his lament that there was never a good time to take time off by telling him, “It’s never the wrong time. If you don’t do it, you will perform worse.”

Another way to encourage driven employees to take a few days is to applaud those who do take time off. Ronda Scott, senior director for content and communications at Evernote, says her company incentivizes taking “real” vacations with an annual $1,000 bonus for five or more business days in a row spent out of the office.

Some companies set parameters to help show what’s okay. Sarah Wetzel, director of human resources at advertising agency engage:BDR, which offers unlimited vacation, says that for planned absences, “the rule of thumb is one week notice per each consecutive day off requested.” If employees want a long weekend, a week in advance is fine. “However, if an employee is requesting two weeks off, we’d like the request to be submitted a few months in advance. This allows for the managers to plan for absences and for the employees to plan for coverage.”

Doing a little bit of work on vacation can also make longer trips possible, and that’s a tradeoff many people are willing to make. Sydney Goldman, manager of marketing and communications at engage:BDR, took a 2 ½ week vacation to Europe this summer.

“I was more scared to take my vacation than any of my bosses were,” she says, but they talked it through. She checked her email a bit, but “I never had to do much, because it was planned well.” As a result, “I came back feeling really refreshed.”

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