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

Unlimited vacation policy is becoming highly popular in the US. World-renowned companies such as Netflix or Kickstarter have introduced this policy to its employees, being welcomed with open arms. How does the policy work, and does it actually work? We have asked Calamari’s customers about their experience with unlimited PTO. Here’s what we’ve learned!

We at Calamari have true HR pioneers among our clients. They run companies all over the world and the trends are becoming a reality for them fast. Some of our customers have implemented an unlimited vacation policy a few months ago, some of them, years ago (before it gained such popularity). Reading about the experience of the giants that are Netflix and Kickstarter, we were truly curious about how this kind of policy works in somewhat smaller, thriving and successful companies. Here’s what Calamari’s customers have to say!

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How does Unlimited PTO actually work?

First of all, an unlimited vacation is still literally a vacation (your vacation) — it is understood as paid time off in all cases. Employees can take as much vacation time as they need, as long as they remain productive. Sounds like heaven, but there are some regulations which apply. One of our customers says:

  • There are no rules really. We ask for 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 client has stricter 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 time above 2 weeks may be approved, the time exceeding 2 weeks may be considered unpaid time off

It’s hard to find any strict limits in major implementations of the unlimited policies, but vacation lasting more than 2 weeks needs an additional approval in most cases. There is actually nothing surprising in this attitude — longer breaks demand the whole team work reorganization, and that takes time.

Employees and unlimited PTO — how do they find it?

Here our customers share a voice: employees do enjoy the unlimited time off option. In many cases, the policy is one of the top three benefits most appreciated by workers. This observation applies not only to our customers’ experience — most companies with PTO say that it is one of the most desired and highly valued benefits.

Pros and cons of unlimited PTO

Some of our customers find no disadvantages to unlimited PTO (!) except for the necessity of having a tool to track their time off. Others say that the unlimited, paid vacation is an excellent talent attraction and retention tool. As an advantage they also mention no need to track balances nor to make payouts at the time of termination.

When it comes to other drawbacks, our customer says:

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

The unlimited vacation policy — to fear or not to fear?

Our customers unanimously say: not at all! Even though they have different experiences with PTO, there is a common denominator — PTO helps to hire the best employees and top performers, and to quickly pick out the bad apples (ones) who do not treat (take) their job seriously. One of our customers says:

  • 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.

The other one only confirms the hypothesis:

  • 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 PTO brings an effect that probably no one expected: with the possibility of getting a / having a non-limited vacation, people work more or similar hours! Employee trust grows at the same time. It is also worth mentioning that companies with PTO are now the ones that hire the best specialists — unlimited vacation is something that talented individualists value most. So maybe… we are risking nothing by allowing our employees to take as much free time as they need?

What do you think?

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