Unlimited Paid Time Off: Burden Or Benefit?

July 20, 2011

Working on the beachWhat if your company offered unlimited vacation time? It sounds like a dream come true, but as The Wall Street Journal pointed out, you may end up working more hours instead.

Open-ended or unlimited vacation policies allow employees to take as much time off as they want. Though there is no official limit, most companies do require that you get the time approved and ensure that things at the office go smoothly while you are away. According to a survey, last year one percent of U.S. businesses offered unlimited paid vacation. The Wall Street Journal reported that the practice started in the 90s, but has recently gained popularity among high-tech, professional-services and other white-collar employers. A 2011 survey of 600 employers by the Society for Human Resource Management showed that two percent of employers now offer open-ended time off.

Tax-services company Ryan LLC began offering open-ended vacation time in 2008 to reduce employee turnover. The plan worked--in 2010 turnover was just 6.8 percent, significantly lower than the 18.5 percent turnover rate the company had in 2007.

CNN reported that software company HotSchedules also offers unlimited paid vacation. CEO Ray Pawlikowski said it is one of the perks that keeps Generation Y workers--who make up more than half of his company--motivated.

"If you create an environment like we have here, which is a fun place to come work, and you engage them and you really capture their attention, they're fantastic employees," Pawlikowski said.

Such policies, however, can become problematic, noted The Wall Street Journal.

For instance, Netflix has offered open-ended vacations since 2004. Though vacation time is no longer tracked, spokesperson Steve Swasey estimated that employees usually take about three to five weeks off a year, which is more than what workers used to take before the policy was implemented. Swasey added, however, that employees stay connected to the office via email or phone while on vacation. In fact, during a three-week vacation in Africa, Swasey said he could be found on the balcony of the condo making work decisions and responding to emails.

"People are on all the time," he said.

Though Swasey does not mind working while on vacation, he said his wife sometimes feels differently.

But it isn't people's bosses who keep them tied to the office. In fact, a survey by Expedia showed that just five percent of Americans said their bosses were not supportive of their paid time off. Instead, workers hold themselves to high standards and do not want to be perceived as "slackers" or simply do not want to deal with the mountain of work that would pile up if they went completely off the grid.

The Wall Street Journal pointed out that vacations can do more than just refresh employees. Some financial-services companies require that employees take at least two weeks off to expose any covert back-office irregularities as well as ensure that workers learn each other's jobs so that no one employee is indispensable.

Compiled by CityTownInfo.com Staff


"Millennials need fun, flexibility at work," CNN.com, July 20, 2011, Elise R. Zeiger

"Paid Time Off Programs and Practices," media.npr.org, May 2010

"Unlimited Vacation, but Can You Take It?" online.wsj.com, July 20, 2011, Sue Shellenbarger

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