No. 1. ‘Unlimited Vacation’ Isn’t What It Sounds Like
Unlimited vacation policies are not as limitless as the name suggests. In reality, they are more of a recruitment tactic rather than a truly boundless leave policy. Jonathan Wasserstrum, CEO of New York-based SquareFoot, explained that they offer unlimited vacation because their competitors do, and they don’t want to appear less appealing. However, they have set guidelines for acceptable use of unlimited vacation. Wasserstrum pointed out that a few employees take four to six weeks off, and as long as their performance is good, the company doesn’t mind. But if their performance is lacking, a conversation about vacation usage needs to happen.
Carinsurance.net, a Bellevue-based automotive insurance website, does not have a specific cap on vacation days, but they allow management to exercise discretion when an employee abuses this benefit. Tony Arevalo, the company founder, mentioned that anything over 40 days off per year would be considered excessive, although no one has come close to reaching that.
No. 2: Underuse Can Be a Bigger Issue than Overuse
Interestingly, the more common problem with unlimited vacation policies is that employees tend to take less time off than they would with the traditional two-week allowance. This underutilization of vacation time can be more problematic than employees taking too much time off. For example, Wasserstrum sets an example by taking three to four weeks off annually and encourages his team to do the same, or at least take a minimum of two weeks off.
The Bonadio Group, an accounting firm in Pittsford, N.Y., implemented unlimited PTO to help employees manage the stress of their busy tax season. Heather Rudes, the senior director of human resources, explained that to ensure employees take enough time off throughout the year, the company requires a minimum of 120 hours of PTO, including five consecutive business days. This strategy prevents employees from taking sporadic days off without actually getting a substantial break from work.
No. 3: Keep an Eye on Time-Off Distribution
Allowing employees the freedom to take time off whenever they want can create management challenges, such as understaffing and project delays if key team members are unavailable. To address this, Zety, a job site in Warsaw, Poland, implemented a master calendar to track employees’ presence in the office. Pete Sosnowski, the head of human resources, mentioned that this tracking system helps the company prepare for upcoming absences and ensure that all bases are covered on time.
Conversely, carinsurance.net discovered that their unlimited vacation policy helped employees manage their time off more effectively. By distributing their vacation time throughout the year, instead of taking it all at once during the holidays, employees felt less pressured to save days for the end of the year. As a result, there were fewer gaps in work coverage during the holiday season, as there was no need to “use it or lose it” at the year’s end.
No. 4: Embrace the Plan Wholeheartedly
Unlimited vacation policies can significantly reduce administrative burdens associated with tracking leave and carry-over from year to year. Some companies believe that management and tracking are unnecessary. They view unlimited vacation as a testament to trust, eliminating the need to monitor the exact amount of time employees take off. Emma Brudner, the director of people operations at Lola.com, a travel management app, emphasizes that precious time shouldn’t be wasted on managing PTO but devoted to more strategic people initiatives. She also highlights that employees’ productivity is not solely determined by the hours worked.
For most employees, the appeal of unlimited vacation is not about spending weeks lounging on a beach but rather about achieving a better work-life balance. It allows parents to attend their children’s school events or individuals with chronic illnesses to prioritize medical appointments without worrying about available vacation days. Brudner emphasizes that this policy is a critical tool for attracting and retaining top talent, especially for parents, caregivers, individuals with disabilities, and those who require flexibility in their personal lives.
