5 Aspects To Consider Before Offering Unlimited Vacation To Your Employees

8 December 2015
 Categories: , Articles


Just between 1-2% of American companies offer some form of unlimited vacation time to their employees, but it is a practice being watched with interest by many startups and large companies. Unlimited vacation time can be seen as a large benefit for employees and a bargaining chip when hiring or retaining talent. However, it is not a one-size-fits-all benefit that can be effectively applied in every company. Even within a company, unlimited vacation may only make sense for certain types of employees. Before you decide to offer unlimited vacation to your employees, here are some things you need to consider. 

Define Positions Where Unlimited Vacation Makes Sense 

Unlimited vacation makes sense when you value quality output from your employees. It can also benefit employees who produce large quantities of work. It can be difficult to implement fairly among employees who work on an hourly schedule or who are paid for their time as opposed to their output. This means that your development team may be able to receive unlimited vacation while your support team needs a different approach. However, depending on your employees and their relationship with their managers, you may be able to implement cost effective unlimited time off for any position.  

What is most important when implementing unlimited vacation is that you have a way other than time to monitor productivity and your employees are passionate about their work. 

Know How to Motivate Your Employees to Take Time Off

Some businesses that have implemented unlimited vacation time have noticed an unexpected drawback. Their employees are not taking enough time off. This can lead to employees feeling stressed and burned out, which can make productivity fall. 

Some ways to encourage employees to take appropriate time off is to monitor the days they take off, pay an incentive if they take more than a certain number of days each year, and lead by example by making sure upper-management takes regular time off. 

Assess Whether Unlimited Will Cost Your Company or Save You Money 

While you may think that unlimited time off will cost you too much money, it can actually save you money. Your employees may be more productive while they are at work and you will not have to pay for unused vacation days at the end of the year. A compensation consultant can help you assess whether your particular company will lose or save money when offering various forms of unlimited vacation. 

Determine When Unlimited Vacation Will Start 

You may want to start your unlimited vacation policy as soon as a new-hire has made it through their training or probationary period. This can be attractive to young talent looking for a new job. However, you may want to offer unlimited vacation as a loyalty incentive to help with employee retention instead. This would give employees something to look forward to after a set time with the company. It would also ensure that you are only offering unlimited vacation to employees that you can trust to not abuse the system. 

Let Potential Hires Know You Have an Unlimited Vacation Policy 

Once you decide to offer unlimited vacation, it is important to let potential employees know about it. Because so few companies currently offer unlimited vacation and so many young employees desire a better work-life integration, implementing such a policy correctly can make you an attractive company. You should list it as a benefit in job descriptions and let any hiring agents you work with know that you will be offering it. 

While unlimited vacation policies will not work for every company, it is something that you need to consider if you want to stay competitive in the search for new talent. For more information about how to set up a system like this, contact a company like Fox Lawson & Associates, A Division of Gallagher Benefit Services Inc.


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