Carissa Braithwaite, PHR
Human Resources Manager

In a constant quest to attract and retain the nation’s top talent, companies throughout America have begun experimenting with offering enticing perks that help them stand out in a competitive job market. While flexible working arrangements, affordable health care, robust 401(k) matching plans and professional development are all deeply appreciated incentives, unlimited paid time off is the allowance that get employees most excited. 

However, uncapped vacation is so rare that only 1 percent of American companies offer such flexibility, reports the Society for Human Resource Management. As a result, it is looked upon as an overly generous benefit that is only offered by companies willing to take a giant risk. 

As we have discovered at SpinSys, the reality is that this policy is mutually beneficial for both employers and employees. Our recent decision to implement an unrestricted vacation policy was based on many factors. Above all, after operating for nearly two decades on a vacation accrual system, we realized that this antiquated policy did not match our belief in treating our employees as individuals who have interests, passions and demanding commitments beyond their jobs. 

Tying Uncapped PTO into the Company Culture

Businesses of all sizes across all industries are discussing the pros and cons of such a radical approach to employee benefits. Reports have trickled in that unlimited vacation time has actually discouraged employees from taking time off work. The fact is, however, that Americans have a problem with taking vacations anyway. In An Assessment of Paid Time Off in the U.S., Oxford Economics discovered that 42 percent of employees do not use all of the vacation days they accrue. On average, they finish the year with 3.2 unused days of their 20-day leave.

The root of this problem lies within a corporate culture that implies it is a burden to managers and team members when an employee is not present to perform their job duties. After extensively reviewing industry anecdotes, I have come to the conclusion that successfully implementing this program depends on how well it is tied to the core values of the company.

Giving SpinSys employees flexibility in their work schedules is more than just a perk. It is a philosophy that we wholeheartedly embrace in our everyday business practices. The same mission and values we strive to achieve in our customer relations applies to our employees as well. At its core, SpinSys is in the businesses of creating time so that our customers can follow their passions. My goal is for every single employee to feel just as empowered to identify and pursue the things that make their life worth living.

SpinSys employees work hard every day so that our customers can unplug from technology to focus on making the world a better place. An unlimited vacation policy challenges each employee to do the same. We want them to value personal and family time just as much as achieving professional success. With our values driving the decision to offer uncapped PTO, I am confident that SpinSys can successfully avoid many of the reported pitfalls that other companies have encountered.

Unlimited, Not Undefined

It is not enough to simply link the policy to company values. In order for it to work, everyone from the CEO to the receptionist must fully understand why it is important to their lives and how it nurtures the health of the company.

The ambiguity of unlimited time off is also a major barrier to employees actually using the program because the truth is that they cannot actually show up to work whenever they feel like it. Establishing policies that outline how to request time off and when it is appropriate gives structure that both managers and employees need to navigate any uncertainties. For example, employees appreciate knowing that the average number of vacation days ranges from three to five weeks with an occasional day off in between. You should even go so far as to let them know that a minimum amount of time is expected.

Additionally, rather than abstractly saying, “Your work needs to get done,” it is essential for employees to set concrete goals with their managers that need to be achieved in a specific amount of time. A little relaxation following an intense project is a wonderful incentive to get the job completed and provides a much-needed refresher for coming back to the office rejuvenated for the next project.

A Mutually Beneficial Arrangement

Employees who indulge in frequent breaks away from the office report that they are more productive, less stressed and highly engaged. Maintaining a balance between their personal and professional lives not only increases their work performance but also encourages them to stay with the company since they do not burn out. The resulting benefits to companies are obvious. Happy employees are more creative and resourceful and keep the organization’s best interests in mind. It also means that HR departments do not have to continually invest time and money in finding and training new employees.

Companies also save a significant amount of money by shaking up their employee vacation policies. Project:Time Off estimates that the hidden cost of unused leave is nearly $1,900 per employee. In addition to paying an accountant to track all of the data, companies also have the expense of carrying over the liability each year and paying out time when an employee leaves.

Promotes Smart Management, Strengthens Teamwork

When employees are trusted to manage their workloads based on the goals they have set for themselves rather than a set number of hours they must log, they are empowered to take ownership of their own success. It also proves that the company trusts them to make decisions that are right for the organization as a whole, which increases their buy-in for the future success of the business. These self-management skills create high-performing employees and foster an efficient atmosphere that promotes a work hard, play hard mentality.

Managers must have the tools in place to make an unlimited vacation policy a priority. They must also model it by taking quality time off themselves so that employees see that doing so will not jeopardize their career prospects. Twice each year, usually in late spring and mid-fall, I completely unplug from the office for an entire week. I also extend the long holiday weekends so that I have unhurried time to enjoy being with my family. Every time, I return with a fresh perspective that enables me to come up with creative solutions that benefit the business.

Ultimately, this process requires trust, collaboration and communication, which again circles back to the company’s cultural values. Teams are strengthened when managers can trust their employees to achieve their goals, employees are able to trust the company to champion their time off and coworkers can trust each other to cover their essential duties and unforeseen crises.

Employees should be encouraged to let their managers know if they need additional time off due to changing life circumstances or if they feel too overburdened to escape the demands of their duties. Clear procedures should also be put into place so that team members can seamlessly pitch in when a coworker needs to step away whether it is for two days or two weeks. With these hard-earned lessons in mind, companies will be able to implement unlimited vacation policies that protect their interests but also demonstrates to their employees just how much they are respected and appreciated.