Friday, March 3, 2017

Unlimited Vacation Time – Is It a Trend that Should Go the Way of the Pet Rock?

Take as much time off as you want. That seems like crazy talk to some employers. But, the concept of unlimited vacation still floats around in HR Departments. Although not yet catching fire with employers, it still remains a viable alternative in a benefit package, especially for millennials who often rank work/life balance as their number one career concern.

Unlimited vacation is not really a free pass for employees to take as much time off as they want. It is an allowance to employees to structure their work time so that they can take time off consistent with meeting their performance goals. Basically, unlimited vacation time is a way of saying to employees “I’m not going to tell you how much vacation you can take, all I’m saying is that you better have all of your work done.”

On the plus side for employers, unlimited vacation can be an incentive for employees. If an employee works really diligently, they can have more vacation time. Additionally, since vacation is not ever actually accrued, employers don’t have to pay out unused time when an employee leaves. Some companies report that vacation use actually declines under an unlimited vacation leave policy because it forces employees to focus more on their performance and responsible workers will generally feel compelled to complete “just one more project” before taking vacation. Thinking about that, though, it’s a toss up as to whether that result is a plus for anyone, recognizing that everyone needs to get away from work on occasion.

On the negative side, it’s a concept that is ripe for abuse by all of the same employees who currently use every available benefit day. It is not likely to change the mind set of many employees. Workers put as much effort into their job as they want to and vacation leave flexibility is not likely to change the attitude of many. Additionally, and more practically speaking, unions are not likely going to hop on the unlimited vacation trend for their workers because it is so tied to performance. Unions like the concept that their members get a set number of days off to which they are entitled, irrespective of whether all the work is done. Finally, public employers, who are required to account for the work and vacation time of their staff, will have a difficult time quantifying and explaining unlimited vacation.  You can just imagine an elected or appointed official explaining to the investigative reporter that their department head did in fact take a total of two months of vacation this year, but it’s okay because he met all of his performance goals and is allowed to take that much time. That might raise the eyebrows of some taxpayers who still themselves are limited to two weeks of vacation every year. Of course, that would be the rare exception because few executives can afford to be away from work for that much time, but we’re in the business of examining the “what if’s”.

Obviously, unlimited vacation is more compatible with benefit packages for executives. Before employers consider a program like this they should be sure to have clear performance expectations for the affected staff in order to monitor the impact of unlimited vacation leave. The policy itself should clearly state that while the company does not limit the use of vacation time, the employees’ immediate responsibilities must be met and they must remain on track to meet their annual performance goals. Additionally, this vacation leave, like other traditional leave, is subject to approval and based on the needs of the organization.