Unlimited vacation policy — should we follow the trend considered to be the future of the time off?

Unlimited vacation policy - the future of modern HR Leave management

Unlimited vacation policy is becoming more and more popular in the USA. World-famous companies such as Netflix and Kickstarter have introduced this policy in their branches some time ago. Is this solution effective? We asked Calamari customers about their experience with an unlimited PTO policy to find out the details. Here is what we have learned!

At Calamari, we have true HR pioneers among our clients. They manage companies around the world. New trends are not strange to them and very often become their daily reality. Some of our clients introduced unlimited vacation policy in their organizations a few months ago, while others did it a few years ago.

Reading about the experiences of giants such as Kickstarter and Netflix, we were really curious how this type of vacation policy works in slightly smaller, prosperous, and successful companies and startups. Here is what Calamari customers have to say about unlimited PTO!

Unlimited vacation policy - the future of modern HR Leave management Designed by Freepik

How does unlimited vacation policy work in reality?

First of all, remember that holidays are still holidays – which means paid days off. It is therefore necessary to ensure that employees on vacation really rest and not work from home. In this model, employees can take as many days of vacation as they need, provided that this does not negatively affect their productivity at work. One of our clients says:

There are no rules really. We ask for a vacation longer than 2 weeks to be discussed with a manager. We ask not for approval, but to give him/her time to delegate work

Another customer applies more stringent rules:

Although our company understands that on occasion time off will be unscheduled, for cases when it is possible to do so – time off should be scheduled at least 2 weeks in advance. Time off requests must be submitted to managers for approval. Managers will approve time-off requests based on employee’s individual performance results, business needs, and coverage. Employees can ask for up to 2 weeks of consecutive time off at one time. Requests for more than 2 weeks must be reviewed by a manager and Human Resources. Although requests for a time above 2 weeks may be approved, the time exceeding 2 weeks may be considered unpaid time off.

It is difficult to set specific restrictions regarding the policy of unlimited days off. In most cases, however, it is accepted that holidays longer than two weeks should require additional permission. This is not surprising – longer absences affect the work of the entire team. For this reason, you need to properly reorganize work during the absence of one person, and this requires time, so you should have at least partial control over it.

Unlimited vacation policy – how employees find it?

We asked our clients what their employees think about unlimited PTO. Most of them were satisfied with this solution and value it very much. For many companies, this type of vacation is one of the most important benefits that employees pay attention to. This opinion is not only shared by our customers. Other companies that have decided to introduce an unlimited vacation policy also claim that this is the most-valued benefit. There is no wonder, it gives employees a lot of freedom, which in today's world is extremely important especially among the younger generation of employees.

Unlimited PTO – pros and cons

Some of our clients, when asked about the disadvantages of unlimited vacation policy, say that they do not notice any. The only thing they point to is the need to provide the company with a time tracking and absence management tool that will help keep order in vacation requests.

Other clients believe that unlimited time off policy is an advantage that helps attract and retain talents in the company. As a huge advantage, customers also indicated no need to track balances nor to make payouts at the time of termination.

Among the disadvantages of this type of solution were:

Another disadvantage is that you still will want to track time off as it is a good metric to know how much time people are taking (for a variety of reasons). However, employees may see the company’s tracking of time off as "micro-managing" or not trusting its workforce.

Should you be concerned about an unlimited vacation policy?

The opinion of our customers is unambiguous in this matter: there is no reason for concern! Although clients have a different experience with unlimited PTO, they all share the same opinion – thanks to unlimited time off policy it is much easier for them to hire and find the best specialists and quickly eliminate those employees who not taking their job seriously. One of our clients believes:

If you hire top performers who are accountable for getting their work done – they are not going to abuse the policy. It will motivate them to get things accomplished so that they can have the work/life balance they strive for.

Another customer confirms this thesis:

So far we've seen no abuses. We've been really lucky. The main issue we face is that there is so much work and people don’t always feel comfortable taking time off, so we have to actually remind and encourage people to take time off.

It seems that the unlimited vacation policy is an effective way to increase team productivity. The conclusion that can be drawn from conversations with Calamari customers gives food for thought. It turns out that thanks to the possibility of obtaining unlimited vacation people work they work as much as before, and often even longer than usual. At the same time, employees' confidence in the management increases and vice versa, which has a positive impact on the atmosphere in the company. It is also worth remembering that companies offering unlimited absence policy employ the best specialists – unlimited vacation is something that very talented individualists love. So maybe we do not risk anything, opting for unlimited PTO, giving our subordinates the opportunity to take as much freedom as they need?

And what do you think about it? Are you considering introducing unlimited PTO in your company? If so, check our article about Tips for managers about unlimited vacation policy to properly prepare for it.

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