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Unlimited Vacation Time – It’s Real. But Is It Right for Your Company?

Learn the pros and cons of offering your employees unlimited vacation time.

The words almost don’t sound real: Unlimited paid vacation time. Pipe dream? Maybe in the past but it’s becoming a reality. More organizations are opting to give employees an all-you-can-eat style policy for time off.

Right away, you’d assume everybody would love to have unlimited vacation time. You might also snicker at companies foolish enough to offer it. The truth isn’t that simple. There are pros and cons for both employees and employers. Find out what they are and how your mileage may vary.

What are the Pros?

  • Morale boost
    A no-brainer that needs no explanation.


  • Cost-effective perk
    Employees get something. You have to pay nothing (or very little). Plus, companies with unlimited vacation policies find most employees don’t take more time off than they used to.


  • The ultimate carrot
    You’ll turn trust into a motivator. Employees who aren’t limited by their time out of the workplace do more while in the workplace.


  • Results matter more
    An unlimited vacation policy cuts administrative and accounting time. Instead of sweating what’s a sick day vs. a vacation day vs. jury duty, you can focus on things that matter: performance, nailing deadlines and growth.


  • Sanity
    There’s a lot of talk about work-life balance. This actually makes it happen. When people have a richer life outside work, you have happier, healthier employees — who are less stressed and more focused.


  • More flexibility
    Without a formal vacation schedule, employees can work via flex-time arrangements. That can mean working remotely — whether that’s from home a few days a week, or even in another city or state.


Okay, So What About the Cons?

  • Abuse
    Naturally, some employees may hit the buffet too often. Placing a cap on how much time off people can take at once is an easy fix.


  • Suspicion (or, It’s too good to be true…)
    Some people might think “unlimited vacation,” really translates “no vacation.” So much for a morale boost. Even worse, these fearful employees who don’t take time off are anything but rested and motivated.


  • Always on-call
    The greater freedom of unlimited vacation time makes some employees feel more obligated to do work and stay connected to the office even when taking time-off.


  • One less carrot
    With open-ended vacation time, you can’t offer increased time-off as a reward for years of service.


  • Problematic planning
    Not knowing exactly when employees are out can be a scheduling hassle. Planning for complex or long-term projects can be difficult.


  • Letter of the law
    What can start out as grumbling or office politics about fairness or favoritism can blossom into discrimination claims and/or legal action.

Where does that leave you? That depends, of course, on your particular company. You have to consider your specific work environment, employees and your own comfort level. Maybe take a little time to think about it — how much is up to you.

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