I saw a discussion among our USV portfolio CEOs yesterday in one of the many communication channels we offer our portfolio companies. The question was about vacation policy.
I was pleasantly surprised to find out that most of our portfolio companies offer unlimited vacation to their employees and that there is almost no abuse of this policy acros our portfolio companies.
Matt Blumberg, CEO of Return Path, linked to a post he wrote about his company’s Open Vacation policy a few years ago. It sums this topic up nicely.
On this topic – I noticed an interesting anecdote in an article about Know Your Company (http://www.fastcompany.com/… — seems some employees prefer having defined vacation in order to avoid feeling fear around how much time is actually acceptable:Sometimes Know Your Company elicits surprising feedback. Sachin Kamdar, CEO at the publishing analytics platform Parse.ly, discovered that a sizable population of his employees wished for a cap on vacation days. “You’d assume that everyone would prefer unlimited vacation days, but some people see it as a tactic to get people to take less vacation.” Without Know Your Company, he says, “We probably would have never known.” He since altered the vacation policy. “We want employees to be transparent to us about what they think is and isn’t working.”
Yep. Way simpler and more fair to offer generous holiday days that are capped. Like they do in most European countries. Better if they rollover. In the UK, generally holidays start at 4 weeks, and go up from there based on seniority. Not unusual for someone to have 5 or 6 weeks holiday a year. Would love to see numbers on average holiday days taken at companies that offer unlimited holidays. $10 it’s a lot less.
Unlimited vacation is one of those things that sounds great on paper but runs into all sorts of issues in practice, starting from peer pressure, through resentment, to wrongly valuing presence at work as something to strive for at all cost. It must (and I’m adamant about the must) always be matched with a minimum amount of time to take off so every employee has guidance on what’s at the very least expected and appropriate (MVV – minimum viable vacation).
Exactly this!! I was just going to say that the critical addition to unlimited time off is a minimum amount. Vacation is compensation. Taking less than total offered is voluntarily leaving compensation on the table, for primarily cultural reasons. Imagine being offered a bonus, and saying “you know what? Keep 20% of it – I don’t want others to think I am not dedicated.”The benefit of unlimited is a signal that the company actively wants to enable flexibility and life outside of work.The drawback is everything you listed.Unlimited + minimum amount FTW!
Yep, I’m torn on this one.Reminds me of The Clash’s song, “Know Your Rights”:”You have the right to free speech… As long as you’re not dumb enough to actually try it!”
Don’t be torn — every bit of research on the topic backs up 100% of what Ana said.Facts > Perception
That song has similar lyrics:”All the power’s in the handsOf people rich enough to buy itWhile we walk the streetToo chicken to even try it”This all reminds me of early Twitter and its LOTD lyric of the day Twitterbot!
Reminds me of the passion of youth
Any time I’ve reminded someone of The Clash is clearly an excellent day in my book 🙂
We got exactly the same sentiments from our employees. We amended it with a minimum mandatory amount of days per year which is actively monitored and discussed during quarterly reviews.
I’m curious – how did you decide on the minimums?
When implementing the unlimited holiday policy we also had a general guideline of acceptable number of holidays. It was not enforced in any way but typically new hires asked about it. We took this number and changed it to a mandatory minimum.
Well put! I’ve seen this with my friend who has an unlimited vacation policy – he’s been in the job for over a year and has only taken 1 week off. I think for these policies to work well there has to be the right culture within the organization. If leadership isn’t taking time off, no one else will. Those that do won’t fit in.
Yes – I feel bad for your friend. Burnout can strike seemingly suddenly and takes a lot of time and effort to recover from. Vacations, time off, hobbies, etc are so incredibly important.
Somewhere out there there must be an awesome employee (perhaps someone in sales or legal) whose output is not a function of time that takes 6 months off a year. Would love to hear about these people?
Hourly pay is always a best guess. I’ve seen it abused on both sides (expected to work indefinitely, vs taking off often). Unlimited vacation is kinda funky.I believe those awesome for 6 months folks become consultants and get a large hourly pay or a good deal of compensation per project.
I know someone who fits the bill. He’s very seasoned with a unique skillset and only makes himself available for projects 6-7 month per year. The rest of the time he spends on a boat.
Works for lobbyists in Connecticut, but only because the legislature ends session in May.
I’ve now worked at two companies that offer unlimited vacation. One has been around a lot longer than the other.At the older one, a strong culture existed of encouraging and supporting people to really actually take time off. When I joined I was encouraged immediately to take time where I needed it (say, to attend a function at my kid’s school) and it was made very clear that over-working and burning out was not cool :)At the newer company, they addressed the issue of people not taking time off by offering a cash bonus for time taken off. You only get the cash if you take time off! It’s a fairly new policy, so I don’t know if it’s a success yet, but it’s an interesting approach.Either way, I’d kind of hate to go back to the old way. I think that this will become the norm eventually and that there’ll be some growing pains until the culture adapts and people feel completely comfortable with and secure in taking time off.
I loved Buffer’s solution and remembered it caused quite a stir when they first announced it a while back. Institutional support is so important here but I still think unlimited w/o any minimum guidance tends to work against more junior or more introverted team members. No matter how supportive the environment is it’s important to design these policies for a wide variety of personalities, roles and needs. Sort of like when restaurants offer up suggested tip amounts so folks from tip-averse cultures don’t have to have their crystal ball out.
For what it’s worth, at 500 people, we haven’t really run into these problems. We do a soft version of MVV, which is that we send managers reports each quarter on how much time off their people have taken on a four quarter rolling basis with guidelines about where people “should” be. But I’ll freely admit that this is a cultural thing — some companies and cultures probably aren’t cut out for it or need to tweak the implementation
Matt as I pointed out in my comment you aren’t offering “unlimited” vacation and your “open” vacation policy isn’t even close to being that in any way. I am not faulting you for anything (Fred used the word “unlimited” in his post which is misleading.).Your policy seems reasonable and it’s more like going on a cruise where they tell you you can order as many entrees as you want subject to certain practical and obvious restrictions.
Thanks. Yeah, I never used the word unlimited, although I can’t imagine anyone does use that word or if so, takes it literally.
Never underestimate the stupidity of people.  Back at my first business we had a $10 minimum for credit card charges. Someone came in and got a photocopy. Cost: 25 cents. So this “clerk” rang it up for $10 and gave them back $9.75 out of the register in cash.
I totally see your point. What happens is you get people at their first rodeo and they go: Unlimited!!! Then shit happens. Nope not unlimited.
My niece just got an “internship”. I asked my sister what she is getting paid. She said $13 per hour. They used to called these “summer jobs” but now they call them “internships”. She was given the option of getting paid $0 and then getting class credit. Or get paid and get no class credit (or something that sounded like that). This is at some small local web design company. Most likely the work and learning will be exactly the same either way.So what they have done is shined things up by using the word “internship” which somehow makes it sound more important no matter what option you choose.
I don’t know what school she goes to but that sounds like bullshit. I always, always, pay interns. Minimum $15hr. Frankly when I worked at Otis during school in the eighties I received $23hr. You should get class credit as well. Saying you can’t get class credit unless you don’t get paid seems to really hurt those that need the money. As you know I am not a bleeding heart liberal, but stuff like that gives people rightful ammunition.
State school in PA wow you got $23 per hour?I am just glad she is doing this. She was working at the Deli and I told my sister that she needed to stop that at all costs. She makes a boatload in tips there it’s like golden handcuffs but it does not advance her goals career wise.
Sorry I was at Penn. Reported to the CIO of Otis. The CEO became CEO of United Technologies. Spent August in France since the French don’t work during that month. Hmmm…kind of like vacation. :-)Agree completely about the handcuffs.
.Reading that a company sends out a report on vacation”taken on a four quarter rolling basis with guidelines about where people “should be””feels like reaching over my head, putting my finger nails on a chalk board, and dragging them to my ankles.Really?That is what management is spending its time doing?Yikes!Has someone thought to straighten up the Keurig cups in the break room lately?JLMwww.themusingsofthebigredca…
Easy there, dude…it takes someone in HR about 5 minutes to run the report out of Workday and distribute it to managers. Managers probably spend 5 minutes looking for exceptions and just work that into their weekly 1:1s with people. And it’s just in service of making sure people are taking enough time off to recharge their batteries. Seems like a pretty core function of management to me.
.Highest and best use of time?Heard of that before, dude?Management is all about the allocation of resources to achieve the organization’s core mission.I’m guess the Keurig cups are pretty damn straight.Micro manage much?JLMwww.themusingsofthebigredca…
Yes. I absolutely consider it to be a highest and best use of time for management to make sure that the people in the organization are doing their best work. Managing burnout is an important part of that. This is a simple tool to help do that. Why bother tracking time off in the first place if you’re not going to use the data?
.Bit of circular logic.You are tracking something that is “unlimited” when the purpose of making it unlimited is to ease the pain of tracking it, while empowering folks to use it without recrimination, while forcing them to use it, and to ensure folks are doing their best work?I got lost on one of the curves.Managing individual behaviors does not contribute directly to team performance. Measuring team performance does.Teams are built of individuals contributing to team performance. Teams compete in the marketplace, not individuals.JLMwww.themusingsofthebigredca…
An example that I often use of making things unlimited to actually decrease usage is free plastic forks, knives, spoons at the local convenience store.Note that there is no sign saying how much you can take. The reason is if you say “take no more than 6” you will increase the chance that more people will take 6 because they will feel it is allowed and ok. If you say nothing, you will have a small percentage of people that take 10 or 20 but most people will just take what they need and not stock up for a rainy day. Less than 6 arbitrarily.As I pointed out in my other comment giving people “unlimited” is better than telling them they can take 3 or 6 weeks. If you do that they will almost certainly feel entitled to do so. This merely flips the burden of proof to the employee to justify taking vacation. It’s a brilliant move and manipulation actually.Of course in “the real world” dealing with real non startup funded companies we all expect good service and people to be around. I had a call with an attorney this AM and asked him what his schedule would be over the next several days (because there is a holiday coming up). He replied that he will be around Friday most of the day and is also available Monday if needed. I like that. That will factor into my use of that attorney in the future and whether I refer business to him if I can. That’s the real world productivity and availability does matter nobody wants to clean up the mess of someone being around. Just like I liked another attorney years ago (who I still use) when I found out he wasn’t married. I thought “good for me he won’t be telling me he needs to pickup his kids from school or attend their soccer game”. Terrible thinking, eh?
.This is earthy street logic which is the result of real world experience.When McDonald’s went into Russia, they put out condiments and the Russians took all of them. Immediately.Nobody in Russia puts out unlimited packets of sugar, salt, etc.McDonald’s learned from the street. That street in Moscow.JLMwww.themusingsofthebigredcar,com
Makes you wonder who McDonalds had on the street in Moscow that wasn’t able to predict that behavior. I used to cart off Keurig cups at the local bank (when I drank that coffee) without a tinge of guilt and in full view of the cameras, tellers and others.
.Of course, you used to go to THAT bank, didn’t you?Somewhere, some dweeb in the bank was calculating the CTA v LTV of LE and saying, “Let’s see, he takes four $0.40/each Keurig cups.”JLMwww.themusingsofthebigredca…
You can actually survive on a mayo, ketchup and mustard diet when you are forced into unlimited vacations. There is a scene in The Terminal movie where Mr. Navorsky, played by Tom Hanks, makes cracker sandwiches with free condiments. ‘Free’ is a very powerful word.
So by analogy we should learn from US street logic.If the consequence of promising unlimited vacation is that nobody takes enough vacation and staff become burnt out surely we should learn from that street?
.Absolutely, then you will have a company in which nobody takes vacation and that will be a great company — in which nobody takes vacation, because as we all know companies in which nobody takes vacation are great, great, great companies.Oh, wait a second. Is that right?Class dismissed.Sometimes, you have to know when to get off the analogy merry-go-round. Really watch out for metaphors. They’re really tricky.JLMwww.themusingsofthebigredca…
The attorney, I assume, is a partner (or sole practitioner)?Expectations are different if you are an owner.
It’s a large firm (low end of the AM200 listing) and this particular attorney is of counsel to the firm.
It’s not unlimited. It’s open, meaning there’s not a fixed number. The purpose is around both empowering people with flexibility as well as trusting them. That doesn’t mean that many people don’t need help self managing.Individuals don’t compete in the marketplace, but effective teams are made up of effective individuals. I believe it’s best and highest use of management to make sure that teams are effective and a piece of that is managing individual behavior and performance. I can’t see a world where that’s not the case. Otherwise we would hire and fire teams, not individuals, no?
.When you do turnarounds, you often blow out an entire team and replace all of them. I have done it more than once.I get the distinction you make that your intention is “open” rather than “unlimited.” I get that.JLMwww.themusingsofthebigredca…
This is really well said. Could not have said better myself. I saw: “we track it in Workday and provide a report for mangers to review:https://www.youtube.com/wat…
I don’t believe the purpose of making it unlimited is to ease the pain of tracking it. IMHO the purpose is to dangle a nice lure before young gullible people to ease recruitment.Couldn’t agree more wrt teams and individuals. But burnt out individuals can’t contribute to teams.
Could not agree more. Company culture is a primary contributor to success and a toxic culture that effectively promotes burnout is a recipe for expensive employee turnover at best.
Why are you picking on Matt when the much better target is Fred and all of his liberal glee over something that to him is glass half full and very honest and open that actually isn’t? Policies that not only take advantage of young naive employees but also disadvantage traditional businesses (like Charlie’s bread factory) that would never be able to compete (or lie marketing wise) and do the same thing. Matt (if you read his post) is much more on the mark about what this actually is. Fred (obligatory “sorry Fred”) is just saying “hey this is great everyone should do this” without acknowledging that it’s not even close to what it claims to be.The “vacation policy” is basically a guideline that allows a small percentage of employees to take more time and saves the company money by not offering all employees the same benefit. It’s kind of a brilliant move actually. But like anything like this over time ti will morph to more restrictions that end up being “3 weeks or lose it”. We can do a reality TV show of what happens in Charlie’s bread plant when he tries to do the same thing with his employees.
.LE, darling, please let me pick my own targets to savage.Matt Blumberg is an experienced, business assassin CEO.One cannot “pick on” someone like Matt. He is more than capable of defending his logic and actions and evaluating a different point of view.I like hearing his logic. Even when I don’t agree with someone — I was a CEO for 33+ years and had quite a few more employees in a few companies — I am always open to learning something new.I love hearing why Matt does what he does. I like watching him rising to his own defense. That is called “engagement.”Mattie will be fine but I will dull the edge of the knife if it makes you uncomfortable. [Not really.]Fred is entitled to a little liberal glee — feels like throwing fresh meat to the lions. He is after all a liberal and these are his babies. It does provoke a bit of discussion which is, after all, an objective of any blogger.Returning to my regularly programmed savaging.JLMwww.themusingsofthebigredca…
Thanks, I guess. I’ll take “business assassin” as a compliment.
He just is “walking things back” you know like politicians do. The insult stands he is just papering it over. Try doing that with your wife sometime and see how easily she will forget when you tell her she looks “fat in that dress” … “oh I was only kidding…”.
Now THAT is funny…
.I am never kidding. Ever.JLMwww.themusingsofthebigredca…
.Ambivalence is never attractive.JLMwww.themusingsofthebigredca…
i would. JLM is a brand to be associated with.
.Actually, JLM has a real brand. Like a cattle brand. I promise not to brand anyone. I wonder where that thing has gotten to.JLMwww.themusingsofthebigredca…
That makes two of us – what does your cattle brand look like JLM?
Trusted brand. I could swear I saw JLM branded venison sausages at Walmart the other day.
Business softie would be an insult, so business assassin has a nice ring to it. Enjoying the banter while fighting off one heckuva fever.
LE, darling, please let me pick my own targets to savage.Nah just reverse psychology and giving me a segue to highlight Fred’s liberal glee.
.You are giving me way too much credit for thinking. I am not that thoughtful. Notoriously shallow. Simple, really.JLMwww.themusingsofthebigredca…
Agree. A simpleton, just like the guy who was just “a retired investor on a pension”.http://www.imdb.com/charact…
That is what management is spending its time doing?If you can’t measure it, you can’t manage it.
Exactly my point.
.What we measure, we manage.The big thought is what is worthy of being managed and, therefore, measured.JLMwww.themusingsofthebigredca…
Vacation? Terrific! A good way to get some of the best work done!Away from the OfficeAt times, I’ve done some good things, but nearly all of the good work was done away from the office on vacation, evenings, weekends, etc. The office was good for my identifying what needed to be done, but the actual work was mostly not in the office.Problem IdentificationThe work that needed to be done had not yet been recognized as needing to be done; I did the first of the problem identification.That means that the problem didn’t really need to be solved? Nope, not at all; in reality, quite the opposite.Lesson 1: Too often now the work of the official, formal organization fails to identify, formulate, and solve some really important problems, ones with really high return on investment (ROI). Sorry ’bout that, but the suits commonly just do not know what the really valuable work actually is. So, if all the work items, tasks, and problem statements flow only down the organization, then the organization is in deep trouble from doing much less well than it should. This point may not have held in the time of Henry Ford or Omar Bradley, but it stands to hold with surprisingly high frequency and importance in organizations involved with information technology now. Sorry ’bout that.Example — Some Commercial AI SoftwareOnce I was on a project at the IBM Research Division writing some artificial intelligence (AI) software to be shipped as a Program Product (IBM’s highest quality software product category). The work was so shipped.One afternoon, I was chatting with one of our programmers who was worried about the work he had to do over, he guessed, the next two weeks.Later that afternoon it seemed to me that what he was trying to do was close to absurd, an awful lot of work that promised to make a mess out of an important feature of our product.So, I didn’t go home but got dinner, thought about the situation, noticed the core problem, formulated it, and thought of a solution, returned to the office, typed in my ideas, stayed all night, typed in some prototype software, ran it, observed that it worked as I desired and expected, wrote a memo to everyone else on the team, and, at dawn, left for home and some sleep.I got back to the office at about noon at which time our programmer was very happy, called me his “hero”, and confirmed that he would be done with the software not in the two weeks but in that afternoon. And the result for the product would be much better.So, we have an example of Lesson 1 above: The organization never identified or formulated the problem. The problem was not really an official part of my work. But what I did made a huge improvement for the work of our group, that is, for our product. I won an award from IBM.Example — Winning a Competitive BidI was in a software house that has a competitive Request for Proposal (RFP) from our leading customer a US Navy research lab.I looked at the RFP and saw a questionable point about power spectra. Then I was supposed to spend a week trying to bail out another project about to fail. Hopeless.So, that week I got aR. B. Blackman and J. W. Tukey, The Measurement of Power Spectra: from the Point of View of Communications Engineering.and dug in. Mostly I read it at dinner eating broiled flounder at a seafood bar.I saw a solution to the problem and wrote and ran some prototype software to illustrate the situation, what the customer hoped for and the best they could hope to get.On Friday I called an engineer at the customer and had us meet and go over my math and software.The customer was thrilled. Our little company got essentially sole source on the work and won the RFP competition and got the business. My CEO said “You are becoming a really important person around here.”.So, we have another example of Lesson 1 above. Again, the organizations never identified or formulated the problem. The problem was not really an official part of my work. But what I did did a lot for our group and business.Above are two examples of Lesson 1, but I can give several more. Indeed, nearly all my best work is of this form.The work of Lesson 1 is commonly done alone, out of the office, on vacations, in evenings, on weekends, at lunch or dinner, neglecting the officially assigned work, etc.Lesson 2: Managers, if much of your best work is not examples of Lesson 1 here, then you are missing out on much of the best — most important and valuable — work your organization can do and have.
Happy to hear it’s working for you and love the quantify and track approach you’ve taken. I agree it’s not for everyone but I’ll give you another argument for a clearly defined minimum amount: paid time off is part of one’s overall comp package and departing employees should be compensated fairly for any time off they’ve earned/accrued but haven’t exercised.Would you share the average annual time off across your company? Does it vary significantly based on location, seniority, or gender? Has it changed over the years?
It’s pretty close to 3 weeks, maybe a little bit over. But because we also are such a flexible environment, there are probably LOADS of half days here or there that aren’t recorded but that would be in a more traditional company. The amount didn’t really change a lot when moved to the Open policy — people just felt more trusted and valued. There’s not a ton of variety within the US by any of those elements. International is different altogether.
Btw, I remember your post so vividly from a few years back when you first wrote it — I think you were one of the first cos to talk about unlimited vacation and your reasoning for it publicly. Trailblazer points 🙂
Thanks so much, Ana!
This is a cultural thingYou start with a larger question — what are we trying to achieve — right? Then choose the components to achieve that end.
Agreed, I find this a complete cop out for management. At our company we give 3 weeks PTO plus 10 Holidays in the USA in years 1-4 of employment. After 4 years you get 4 weeks PTO. We cap accrual at 2 weeks so this means you have to use your vacation. We expect everyone to work hard when at work, but to also strive for balance with personal and family time. We also have aggressive policies on wellness and health.
I think it’s key that you have an end goal in mind reinforced by your culture message and that your vacation policy is not isolated but fits into a larger goal with other supporting features.
“I agree with you more than you agree with yourself.”One HR lead at a NYC startup told me, “Our no-vacation policy means that nobody ever takes a vacation.”
I really wish there was more emphasis placed on this type of work/life balance (e.g. make sure you take some time off regularly) especially in startup land. I really don’t see how we can expect knowledge workers to be productive over long periods of time if they don’t take good care of themselves. It’s the equivalent of asking an athlete to constantly train for peak Olympic shape; that’s not sustainable long-term.
I’ve noticed a few contributing factors in the community. One thing is when work becomes your social life: your co-workers are your friends, why leave the office?(Then there are other factors that people have mentioned here, founders and senior people don’t take time off, and don’t realize the impact of the example they’re setting.)Another is that it’s tough to know whether you’re doing a good job when you don’t have clear cut goals. So you just come in to work every day and do what’s in front of you. Your fear is that If you were to step out, something would fall apart — and it’s probably often true. So there’s a constant low buzz of fear around taking time off.TBH I felt this way as a young person, there’s an experience factor. I remember arguing with my boss about the (legally mandated) 2 consecutive week vacation required for people in “sensitive” jobs in banking. (Low level fraud, it was believed, falls apart under these conditions.) My boss explained that the vacation rule was also forcing function for good management; if the work wasn’t organized to tolerate an absence, there was something more going on there.I have a whole world of thoughts, too voluminous for here and now, on why companies don’t prioritize goal setting. It can be a lack of awareness of human psychology and how people actually work. (Compounded by entrepreneurship porn that says that goal-setting is obsolete.) Yes, in a 15 person brand-spanking-new company, you want to allow for exploration and iteration. Maybe it’s too soon then. By the time you’re at 30 people, there should be some real shape and boundaries to your expectations of your people.Finally, a disjointed comment, maybe someone else here has made this point. MVV policy, when stated for people outside a senior team, would include not being online and answering emails, not taking conference calls, not being in Slack. In other words, actually not working.
I cannot agree more. If you give unlimited vacation and I decide to come in 1 day a month do I get fired???Of course.So nope, its not really unlimited vacation.Now I am all about not having policies that manage down to the lowest common denominator. As Bill Parcels famously said what is my policy???? I have 53 of them, one for each and every player. Lawrence Taylor had very different policies than the 53rd man on the squad.Give people a number they need to take off. Exceptions are exceptions. My super productive decade long employee who had MRSA after an operation for an old knee injury? Gets a pass. My junior employee that decides they are going to play a video game all night??? Not so much.
10000% agree. From the employee’s perspective, an “open policy” is not a policy at all.
“Unlimited vacation” always seems a bit gimmicky to me.I think I’d take it more seriously if presented as “open-ended” or “unrestricted.”But then I’m not a good one to talk about vacation. Trying to get better about taking time off. Some of it boils down to time management.
Funny, I was watching Michael Moore’s movie, Where to invade Next yesterday on the plane, and he goes to great length comparing European vacation practices to the US companies.Sum of it, unlimited vacation is a great policy, but it is offered only by a few companies. The onus is on the company, and if you are the lucky recipient, that’s great. But it’s not something that is widely practiced.And I’m not sure how it scales. Are there large companies, 5,000+ employees where this is being applied?
GE. Virgin. Evernote, Hubspot,
GE? Wow. Didn’t know that
I was watching Michael Moore’s movieThat guy is such an (entertaining) blowhard. Would love to see how he runs his own organization when he is making a movie and on deadline and someone needs some r&r time.
I could see some parts being overblown or repetitive, but he makes some valid points.
Is that “almost no abuse” as in employees don’t take too much vacation? Or “almost no abuse” as in managers don’t lean on employees through pressure–real or perceived, deliberate or subconscious–to keep putting off that trip until “things settle down around here.”Five out of five commenters agree: “unlimited vacation” isn’t all it’s cracked up to be.
Agreed! Although I think we all applaud the bartender for talking about the topic and also agree that unlimited is conceptually better than a miserly amount of vacation with poor cultural acceptance of even that.I think a big part of the response is that the tone and stated intent of the post is about being very supportive of employees — the intent and policy is definitely favorable, but because it’s framed that way, we are more inclined to highlight the hidden anxiety created by an unlimited policy.
We do this – there is no abuse.BUT – you have to be mindful of separation scenarios and “accrued vacation”.
Regarding not paying out unused vacation when someone leaves or at year end, the best way to think of vacation is as part of compensation. If someone took no vacation and contributed intensely to the company, then why not compensate them for this amount?
totally. The problem presents itself when bad actors exploit the good faith or the “lack of tracking”
I would strongly assume that bad actors are not isolating their bad actors to abusing vacation policy…. Important in some cases to nip that in a bud before the level of exploitation manifests itself explicitly with vacation time.Relevant recent post: http://avc.com/2016/05/when…
Why not? Because most companies sole focus is to make money. When I left a Wall St. bank after 5 years of service and tons of hours contributed, late nights and weekends and foregoing vacation do you think they paid me my accrued vacation time? Of course they didn’t.
I mean sure – agreed – but the context of this discussion seems to be around finding the right incentive framework to attract best talents and provoke highest productivity. Wall Street (I work in finance, did 6 years at one of the largest banks) is a bit different its culture and perks vs tech cos at this point in time. Paid time off = compensation. Leaving money on the table is silly. In that context the classic move is to do 2-3 weeks of unused vacation before quitting.
Early stage where everyone is a contributor and key, works with the right culture and people.Mid to later stage when there are more layers, more support staff, invariable requires more definition and more granularity.Some people do what is right for the whole and find integration, certainly not everyone.
You can’t abuse something that doesn’t exist.By definition, if there was truly an unlimited vacation policy it would be impossible to abuse.Fact ‘abuse’ even comes up in discussion implies to me. There isn’t really unlimited vacation. It’s just propaganda. And employees are expected to adhere to unspoken “norms”.
A related note is to be generous on “defined holidays” where employees don’t have to feel any stress for putting in time off. Interesting to see how this works at small to medium size companies across different geographies. My predominant experience was with a large European bank that (in the US) followed the NYSE in some divisions, the Fed in others, and then obviously various European holiday/bank holidays overseas.
There isn’t really unlimited vacation. It’s just propaganda.Agree but I would call it simply marketing bullshit. The link to Matt’s post calls it open (sorry to repeat myself) and it’s defined in a clear way that makes sense. You have to get approval, you have to meet certain work standards and so on. He doesn’t wrap it in some pompous term and then back off the term in a devious way in fine print or examples. I have no clue why anyone is calling these policies “unlimited” when they are not. Doing that reminds me of internet companies that offer “unlimited bandwidth” (for hosting) or any other service. It’s all bullshit done to take advantage of people who haven’t been around the block to the detriment of their more honest competitors. But even Return Path is not 100% kosher. He says:At Return Path, we’ve had an “open vacation” policy for years, meaning that we don’t regulate the amount of time off people takeRP does “regulate” the amount of time that people take off. Read the rest of the blog post. Might be better to say “we don’t regulate other than in the practical ways stated below which is needed for the continued health of our business and our customers”.
Seriously. If it was truly “unlimited” I could declare I was on vacation from day one and never show up to work while the company still pays me. Clearly that’s absurd, but it just means that unlimited vacation plainly isn’t. There’s obviously limitations, the company just doesn’t bother to let you know what they are. Cross some invisible threshold and you’re “abusing” the policy.If these companies were offering were serious about making sure employees got needed R&R rather than taking advantage of them, they wouldn’t offer “unlimited vacation”, they’d pay overtime. It’s morbidly hilarious how differently employers will act when extra labor costs them real money rather than getting it for free.
In sales, take as much time off as you want. But if you don’t hit quota, don’t come back.#unlimited
Working on this now for our company. Wondering if “Minimum Vacation” policy serve both employers/employees better? (generous total days off but you’ve got to use “at least”…)
Unlimited vacation policies are a terrible “perk” of the tech industry. Every study on them shows that they lead to people taking *less* vacation.Free meals. On-site laundry. Ping pong. These are all gimmicks to get people to work more, and take care of themselves less.
Having worked at two places with it, I have to disagree. I would never want to go back to prescribed PTO. The important thing is to encourage people to take time when they need it. It’s a leadership/culture thing.At both places I’ve worked, it has worked great. People are happier and healthier.
Definitely – I just posted how my read on unlimited vacation is the company creatively getting around labor laws in states like CA where you are legally entitled to all vacation accrued upon termination of employment, regardless of the reason. So with unlimited vacation I should be entitled to unlimited pay when we go our separate ways?? Sign me up!
Can you reply with those studies? Would love to read them. Thanks.
There are many stories of CEOs coming forward with the stats of what happened after they instituted unlimited vacation policies, and that they didn’t work. A Google search will give you heaps of them.Here’s one from Kickstarter: http://fortune.com/2015/10/…
“Paid Time Off scheduling is subject to approval by your manager, who has sole discretion to approve or deny requests under this policy. Requests of greater than two consecutive weeks or more than two weeks in one three-month period require approval of your Executive Committee member.” This is not the definition of Unlimited Vacation if it can be controlled at the manager’s sole discretion. It’s a false claim.
We offer unltd vacation at SE and people in the exec team set the tone – people use it when they are ill, take a week off with decent notice now and then (around once every 4-5 months) and generally are responsible around it.We also have a flexible working policy where people can work from home when they need to.Bad actors get called out very quickly and we dont take a lot of drama well, because its the managers and the executives who are stakeholders of this policy.Note: We’ve had people take a month off, work from home intermittently due to an illness and another time (diff person) due to an accident.If they care about the business and are responsible in the right culture, it is not coercive
“We don’t accrue for it or pay out ‘unused’ vacation” might be the most informative sentence in that blog post.
Totally agree. This is an accounting issue more than an HR issue. Very few employees will actually take more than they would have been allotted under the old method because of all the previously stated reasons, and the company doesn’t have to carry a hefty liability for unused days nor will it have a payout when someone leaves.
.It is actually quite an important accounting issue. If you have 1,000 employees accruing 20 days of vacation per year each, you have an enormous accrued liability at the end of a year.JLMwww.themusingsofthebigredca…
JLM, do you think that may explain the trend toward “unlimited” vacation?
.Not really. The accounting treatment has to be based on some definitive, written “expense recognition” policy.I think it’s just trendy.JLMwww.themusingsofthebigredca…
I don’t understand what you’re saying. From my understanding, with an unlimited vacation policy there is no incremental expense on top of standard annual salary expense. I agree it’s trendy, but I believe the majority of employees get hurt here…there are plenty of people that just don’t like to vacation that much and have always enjoyed watching their eventual payout increase with time.
.When I got out of the Army, I had 90+ days of accrued vacation which I got paid out as a Captain though I’d earned most of them as a lieutenant. It was a nice bit of money for the times.JLMwww.themusingsofthebigredca…
Excellent! I would constantly track my accrual and it would give me comfort that if/when I left my job, it would allow me a couple/few extra weeks of cushion before I had to find a new one (admittedly not necessarily in the employer’s best interest here). Or I could buy a new TV.I was a single guy not making a lot of money. Vacations were more or a liability!
Totally agree here. Unlimited vacation is total BS. In CA earned vacation time is considered wages and any time you accrue you are entitled to. From the CA Labor Policy ‘For example, if an employee is entitled to two weeks (10 work days) of vacation per year, after six months of work he or she will have earned five days of vacation. Vacation pay accrues (adds up) as it is earned, and cannot be forfeited, even upon termination of employment, regardless of the reason for the termination.’ So under an unlimited vacation policy when I leave I get unlimited pay??
I still missed the mandatory random days off in the Middle East whether it was due to a death in the ruling family or just because. Kind of like snow days here.
Also when the Internet dies or GitHub goes down.
Does the French 5-week legal paid holidays + 9-day working-hour-compensation package (we work more than the legal 35-hour week) qualify as “unlimited vacation policy” ? Many people struggle to take all their vacation days down here. Ain’t that cool?
There you go – if we had that in the U.S. companies probably wouldn’t need to offer unlimited PTO.
Unlimited vacation is a red flag just like a ping pong table and a kegerator in the break room.
Have to disagree. I’ve worked at two co’s with unlimited vaca policy, and both are top-notch organizations that anyone would love to work at. Not a red flag in any sense of the term.
Were they a) profitable Kirsten and are they b) still around? In business to me “top notch” means long term viable. Which is good for employees, vendors, customers.
Yes, in both cases: Automattic and Buffer.
.Yesterday I was an Election Judge for Precinct 214 in Travis Country (Austin, Texas). Two Judges, two clerks, no alternate Judges.It was a Joint Primary Runoff Election (JPRE) which means it was a runoff for any positions in which the primary did not result in a clear winner. The Republicans and Democrats ran it together, hence “joint.”We had a total of 49 voters. To put that in perspective, we had more than 1200 for the primary itself. We would expect 400 for “normal.” We had about 800 for the Uber election.How does this relate to “unlimited vacation”?When you give folks “unspecified” rights — even important unspecified rights — they will not exercise them in accordance with your expectations. Sure, the primary was a big deal with that guy, what is his name? Oh, yeah, Trump on the ballot.[Note: The huge swell of voters for the primary is still only 20% of registered voters statewide though it is a big phenomenon. Anyone discounting the importance of this trend is going to be very surprised come November. This is a grass roots observation. I saw it first hand.]I fall into the camp of CEOs who think that taking vacation is basic hygiene. People need vacation — to refresh their minds, to inject energy into their personal relationships, to go to the beach, to bond with any persons they have parented or married, to see their own parental units — for reasons that are important to the company.I used to “force” people to take time off by shutting down the company between Christmas and New Years — WHEN NOBODY USED TO DO ANY WORK ANYWAY.Used to drive my CFO nuts as he had to accrue for the vacation time in a rather complicated manner. He used to beg me at the beginning of the year to know whether I would do it or not. I would always say, “Hmmm, don’t really know.”Of course, I had done it for decades. I liked the surprise element because then folks didn’t jam it full with activities. People used to ask my 20+ year assistant — “What’s he going to do?”She would say, “For thirty years, he has done thus and such.”I want to note one other caution: If you are going to embrace this policy (which suggests you actually have a policy manual, wow!) then you should also be careful to see how hard folks are working during the normal course of things.JLMwww.themusingsofthebigredca…
.Point of order?The use of the term “vacation” shows how stilted and immature this discussion is. The state of the art is PTO (personal time off).There is a big long, complicated body of psychological thought as to why companies use that term rather than “vacation.” I have heard it but I did not pay enough attention to be able to regurgitate it.What makes good companies great?It is not likely to be their vacation policy.Special Forces has the exact same vacation policy as the rest of the Army. It is not what injects the “special” into Special Forces (a name which has always tickled me).I think vacation or PTO is a matter of personal hygiene. You need enough to look and smell like a professional. Not more. Not less.JLMwww.themusingsofthebigredca…
Until they run a truly anonymous poll amongst their employees voting on this I am not buying it. The fact that the boss thinks there’s “no abuse” doesn’t mean it’s working well.You could argue that “abuse” would be a sign of a the policy working as it’s name says. Until someone takes a year off with no negative repercussions, it’s not a truly unlimited vacation policy. And if it’s not truly unlimited, then it should be renamed into “vague vacation policy”.
.Every company should conduct an Anonymous Annual Company Survey to get a good look at the back of its head. The place you cannot see when seated at the CEO’s desk.Agreeing more with you than you do with yourself.JLMwww.themusingsofthebigredca…
This is 100% true.
I’m going to have to strongly disagree with you on this one. I’ve been both an employee and a manager at several NYC startups. I’m also familiar with the experience of a lot of my peers as employees in many of the NYC startups.Unlimited vacation really sucks. What ends up happening is that vacation is now subject to manager discretion. In a few rare cases the managers will flat out pressure employees to not take their vacation. I’ve seen it a few times and it’s horrible. In many more cases the managers are ambivalent about the vacation time, but employees with less confidence in themselves infer that they will be judged for taking vacation. This is especially true for new grads, people that have imposter syndrome, or people in roles that are less sought after. If you are a Type-A engineer 5 years into your career you can navigate unlimited vacation time without issue. If you are a brand new grad with student loans, no savings, no family to backstop you, in a customer support role, how much vacation are you going to take?As a manager I enthusiastically encouraged my team to take vacation. What ended up happening was that the best people on my team were only taking around 5-10 days a year, while their peers were taking 15-20. No amount of encouragement would get the best people to take more time and they didn’t realize the disparity, but from where I sat it was obvious.For me personally, the first year I had unlimited vacation I took around 7 or 8 days. My wife took 3 days in her first year at a prominent NYC startup. The following year she tried to take a week off and her manager asked ‘didn’t you go to there last year?’. That was when we realized no one was appreciating our lack of taking vacation and it finally clicked that we should just take 3 or 4 weeks a year. If it’s unlimited then lets use it. But that took us nearly 2 years to figure out.I’ll also note that the tide is turning on this. Maybe I’m just getting older, but my peers have all learned that the game is rigged. Unlimited vacation is thoroughly in the ‘cons’ column for any job I consider taking.
To make unlimited vacation work, its counter intuitive but you need managers trained to encourage their employees to take time off if they’re not taking enough, in order to avoid burn out. Many of our customers have someone in HR who’s has it as one of their priorities to track this and work with managers on it.Unlimited doesn’t mean vacation days are not tracked. In fact, the most important thing with unlimited is that you’re communicating effectively about when you’ll be out to your manager and to your team. And if you use a good tool for this (something better than a shared calendar) it can be tracked so managers and HR can see who is not taking enough vacation (or abusing it).Pingboard is a product designed exactly for this purpose. I am the founder. We help teams always know Who’s who? and Who’s where? at their company.I’m a big fan of unlimited vacation policies when done right. But I agree, many companies don’t do it right. And it probably should be called “flexible” or “unlimited as long as you’re getting your shit done”.
I was pleasantly surprised to find out that most of our portfolio companies offer unlimited vacationWhy are you calling this “unlimited”? Even Matt Blumberg in the link you gave doesn’t call it “unlimited” he calls it open and then clearly defines it subject to certain terms and conditions.
sounds like the unlimited, calls/data and sms package that I used to have with my mobile operator Three (subject to “fair use” of course) which they have subsequently withdrawn and now opted me into a “much better” more expensive package.On a more serious note in Europe we have a much more generous holiday allocation which pretty much works. I had a boss from the US once who could not get his head around the fact that many staff took 2 week summer vacations.I’d be really interested to know how much time the average employee takes off at somewhere like Return Path
What is considered abuse to unlimited vacation policies? If abuse is possible, then there *is* a limit. And people can have different criteria about what that limit is.The problem with the unlimited vacation policy is that it’s unlimited in theory, but every one has a limit in their heads and they don’t say it. They have expectations about their employees but they don’t share that information with them (or worse, they send the opposite message saying they have an unlimited vacation policy).
There’s a financial aspect to this that I hope can be addressed. My understanding is that when there is defined vacation, the company has to keep the cash equivalent in compensation for accrued vacation time on its books. Is that right? And if there is no defined vacation time — ie, “unlimited” — does that mean the company can then use that cash differently?
This is a good/interesting accounting question. Would love to hear the answer.
Amazing what happens when the Mgmt team builds trust
We have unlimited vacation at Envoy and no abuse either. It’s pretty crazy what happens when you treat people like grown ups.
Worked at a startup with this unlimited vacation policy. Problem was that senior leadership (CEO, CTO, VP Engineering) never took vacation. It set the tone and expectation that, while yes you can take as much time off as you want, it was expected that you would work hard and work all the time like the leadership does. I ended up taking less vacation there than any other job I had ever worked. Employees felt guilty or like they were slackers when they took time off. It was just a good policy executed poorly.
Contributors:those among us who have been fortunate to create businesses in the VC/Angel Investor/Old Family Money are not applying many of the incredible perks of being fortunate and talented enough to be offered a financial package that allows them not to worry about taking a unlimited vacation to Bora Bora. When a person is already established financially the real world principals rarely applies. What Ivy league college dropouts get the opportunity to run a billion dollar company? It is not occurring in the real world with any frequency. The person working for under twenty thousand per year can’t afford to take any vacation. They need to the money to survive. We realize this will fall on deaf eyes because it just doesn’t apply in this room. And the I pulled myself from the bootstraps and made it successfully since you were twelve years old on your own. Save the isolated story. We are shocked that gambling is going on in this establishment.https://youtu.be/SjbPi00k_ME
The perfect bad storm is unlimited vacation + guilt tripping for exercising even a normal amount of vacation. Everyone needs rest and nobody benefits from passive aggressive pressure.
I hate to do this but rather than speculate about the benefits and costs of vacation it may be helpful to look at the research. Not surprisingly there has been quite a bit of work done on this.Let’s check this out for starters:https://hbr.org/2015/08/the…
Compare unlimited vacation to what you and your partners have Fred. Are they equivalent downtimes? Should they be?I much prefer a fixed alotment and it be generous. Perspective and clear decision making comes from slower moments. When I’m busy at work for two long, I can feel the procedural part of my problem solving dominate. The creative side comes at random weekend moments.Just searched back: this may come in handy while thinking it over: http://www.feld.com/archive…Everyone has personal downtime needs. I wish I knew precisely what mine are :D.
Must be fun calculating labor burden with an open policy…Building a culture of trust and a community that can self regulate, that’s awesome! I wonder how a company accrues vacation time on the books and how much time can employees take along with them, once they depart?
I don’t understand why people don’t want to take their vacation. Don’t people want to see the world? Do work on their house? Take their kids somewhere during the summer?
Imposter syndrome — that’s why at both places I’ve worked with open PTO policies they talk constantly about imposter syndrome to help people realize they’re good enough and deserve time off. Workplace as therapy 🙂
Sounds like some enlightened HR people. Good for them.
In many start ups nobody takes vacation and accrued vacation doesn’t appear on the books as a liability.
No abuse of policy + no requirement to pay accrued vacation at termination. That’s a fantastic setup for the employers, but a lousy one for the employees.
It should really be called “Unlimted PTO**” (** “…per management approval, other team members covering for you, making up the extra time off to hit deadlines, no overlap with other employees in same department, etc…”). If I’m wrong, please correct me!I’ll assume all intentions are good with unlimited PTO, but isn’t the reality that when/if someone leaves, the company won’t be on the hook for unpaid PTO (required in certain states) since no specific PTO is specified in an employment letter? Similar to Zappos paying people to quit after their first 2 weeks – saves the company from having to pay unemployment when/if people quit? Also, wouldn’t someone “abusing unlimited PTO” technically an oxymoron? 🙂
Exactly. If the goal is being generous, offer a generous amount. Start with four weeks (e.g. European norms) and allow unlimited above that with all of the existing caveat language described in the linked post by Matt.
Abuse is a two-sided coin. I like the idea of minimum. One issue that I haven’t read a good answer for is how is “unlimited” vacation cashed out when an employee leaves? I think the answer is “It isn’t”.
.How exactly does one “abuse” a policy which is UNLIMITED?Don’t quite get that.JLMwww.themusingsofthebigredca…
Been there. Done that. It isn’t. But that was ok, IMO.
“unlimited” is probably not what is actually meant. IMHO “untracked” or “unmetered” might more accurately capture the intention.
.Fair play to you.Doesn’t solve the intellectual dilemma.With just about everyone able to access thesaurus.com, why don’t we get the word right?I, personally, prefer FREE RANGE.JLMwww.themusingsofthebigredca…
yeah, there’s a significant semantic component here. a bit like ‘minimum wage’, which for millions of people will mean the maximum wage.
Yes, especially in smaller teams. It’s not healthy.
Our policy is in my post on this which Fred linked to – https://www.onlyonceblog.co…Employees love that we trust them and don’t count hours. I’ve never heard one peep about the “downside” of not paying out unused vacation on termination.
How much is too much?
By ‘should be fine’ you mean is enough? right?
I find myself wondering if this is so trivially simple a question that it should be resolved by referring to your instincts. ‘…in my opinion…’ isn’t terribly data or research driven and opinions vary wildly when not grounded in anything.You have of course an absolute right to your opinions but it might be worth reflecting if they stem from some other attitudes “There are way too many tree huggers already.”There is research on this topic and my instincts are to study it and not to leap to form opinions about how much rest or vacation is enough. I don’t mean to diss your instincts, I just think it is a serious topic deserving serious analysis.
You don’t have to design such experiments as they have already been designed and conducted. All you have to do is read the results :)I’m hoping all the talk about “fellow whiny millennial pussies ” and “hair-gel type bankey douchebags” and “pretentious ignorant ass wipes” is tongue in cheek. Please tell me it is.
Would you like some science?