Unlimited vacation: 4 convincing reasons to add this benefit
February 15, 2012 by Christian SchappelPosted in: In this week's e-newsletter, In this week's e-newsletter - benefits, Incentives, Latest News & Views, Pay and benefits
Snag and retain top-notch talent. To do it, here’s one benefit the founder and owner of the 2011 U.S. Chamber of Commerce Small Business of the Year recommends you offer.
The benefits: Unlimited vacation days. It sounds scary, but Joe Reynolds says it works beautifully for his business, Chicago-based Red Frog Events.
All it takes is the right people, Reynolds explained to Inc. magazine.
Employees at Red Frog can go on holiday whenever they please, no questions asked. The only prerequisites: Employees have to a) make sure their work is getting done, and b) make sure they’re covered when away.
Reasons he says your company should try it:
- It treats employees like adults. Reynolds justifies giving his employees unlimited vacation time by saying if they can’t handle the responsibility, they shouldn’t be working for you.
- It cuts costs and headaches. As most HR/benefits pros know, tracking employees’ vacation days is a time-consuming headache. Unlimited vacation eliminates all that.
- It’s a sign of appreciation. An offer of unlimited vacation is a clear sign you appreciate your employees’ hard work and are willing to reward them for it. As a result, they do their very best.
- It attracts and retains talent. This would be a huge boost to any employer’s benefits package. Who wouldn’t be attracted to a company with such an enticing offer?
Tags: Joe Reynolds, Red Frog, Small Business of the Year, talent, unlimited vacation, vacation
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February 14th, 2012 at 1:26 pm
I’d be interested to hear from any other companies that are trying this. How do you deal with people who abuse the privilege? (As we know, there’s always someone who will try to push the envelope and end up wrecking it for everyone.)
February 15th, 2012 at 11:32 am
We use something similar – we don’t call it “unlimited” vacation, but we do not limit or count vacation days. We use the same stipulations about coverage and getting the work done. It works beautifully for us. As the article states, the key is in hiring the right people.
It would be easy enough to enforce discipline if the policy were to be abused since time off is conditional upon performance and coverage, but I’ve never had it abused. It only became a problem one time. That situation was a rare case of an employee trying to manage a critical family illness while still working fulltime. He was extremely aware of what he called “taking advantage” of the company and eventually resigned to become a caregiver for his family member.
Too many times, I’ve seen employers treat loyalty and dedication as if it were a one-way street. So many are willing to accept the extra effort and time employees put in but rarely see a need to return it. We’ve found that anything we can do to help employees achieve a work-life balance is invaluable – we reap the benefits many, many times over.
February 16th, 2012 at 5:06 pm
I have a question about the ‘unlimited’ vacation, how is it paid out at the end of employment? Say someone leaves the company, how do you know what was accrued and/or available, because vacation must be paid out at the end of employment.
February 18th, 2012 at 1:55 pm
@Yvette
You don’t earn it Yvette so I assume nothing is paid out. It is simply there as a benefit to use. For example, we don’t accrue the ability to use toilet paper at our work (we can use some on the first day of employment) AND we can use as much as we want. (Hey, it has monitary value too!!) I won’t, however, expect to get some when I leave.
February 20th, 2012 at 10:01 am
I am wondering the same thing Yvette is. How do you calculate what is owed to the employee upon the end of their employment?
February 20th, 2012 at 1:21 pm
Is the “unlimited vacation time” paid, and how do you ensure your organization is administering this benefit fairly and consistently?
February 20th, 2012 at 1:39 pm
The impact in states such as California was the first thing that came to mind. SHRM has a great article in the 2011 archives about this:
http://www.shrm.org/LegalIssues/FederalResources/Pages/unlimitedvacationpolicies.aspx
February 24th, 2012 at 1:45 pm
This is an excellent topic. This is a very appealing benefit especially to younger generations and for work-life balance. However, I think that it will only be appropriate in certain settings. It will be very challanging to administer in industries where there are several shifts. Of course the first questions, especially in some states, that comes to mind is the one that Yvette brought up, but as mentioned later it depends how you administer the benefit and what you promiss the employees. FLSA doesn’t require to pay out vacations, sick time, etc, but State’s regulations may differ. I have also read that one company offers 365 sick days and their call ins are very low. Once again this is a great incentive and also a big step to show your employees that you really want to provide a respectfull place where everyone is treated as an adult, there is trust from the beginning. If you set up a culture such as this you will automatically attract the right people and will have the right relationship with your employees.