The hottest new job perk these days is unlimited vacation time (aka “discretionary time off”, or DTO). That’s right, UNLIMITED VACATION DAYS! (WOO HOO!)
A growing host of companies have joined the unlimited vacation day trend. Immediately, you’ve probably entertained visions of sipping martinis on the beach – maybe for a month or longer – while your co-workers come and go as they please (when inspiration finds them and pulls them back). Want to extend that vacation another week? Sure. You have unlimited vacation days, after all.
Not so fast!
These corporate PR stunts may temporarily boost these megacorps up the “100 Best Companies to Work for” lists and even lure in a few new talented employees. I, on the other hand, will happily take my limited annual allotment of vacation days over your utopian unlimited days. If you’re a reader, you would be wise to do the same and not get baited by this wolf in a sheep’s clothing. Here’s why:
Americans are taking only 51% of their paid vacation days. And 61% of those who do are working while they are on vacation. Think about that for a minute – even when we are given a “budget” of days to spend, we only spend half of it, on average. And you know how much Americans love spending their budget <winking at you, negative personal savings rate>.
Even when we do get and take the days off, we are still guilted in to working. The most commonly cited reasons for not taking vacation days are:
- 33%: Afraid no one else at my company can do the work
- 28%: Fear of getting behind
- 22%: Complete dedication to company
- 19%: Want a promotion
- 19%: Feel like they can’t be disconnected
- 18%: Want a pay raise
- 17%: Afraid of not meeting goals
- 17%: Fear of losing job
- 16%: Believe working is better than not working
- 13%: Want to outperform colleagues
- 6%: Afraid of the boss
Only 3 of those 11 reasons are not based in fear. And even the three that aren’t (“complete dedication to company”, “want a promotion”, “want a pay raise”) probably have a deeper root cause that is based in fear (e.g. fear of not having enough money, status perception, or fear of getting fired).
Never has there been a time in modern history that we feel more indebted to give our employers more of our time than right now.
You are fooling yourself if you think that everyone’s fear is going to magically disappear when 10, 15, or 20 days is changed to “unlimited” in your employee handbook.
In fact, with the onus on you to determine your own allotment, it might event become greater. If you have any doubt about the agenda here, check out the following commentary from Virgin and Tribune:
Tribune in an internal memo to employees:
It’s your responsibility to have an open discussion with your supervisor about your time off and its impact on your performance. As always, future career opportunities are assessed based on your performance and potential.
Branson (Virgin CEO) on the new benefit:
They are only going to do it when they feel a hundred percent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business — or, for that matter, their careers!
Congratulations Mr./Mrs employee – you now have to convince your boss and everyone else around you that you are not a selfish/lazy colleague for taking an afternoon off to take your kid to their soccer match or music recital. And then do it again every single other day off.
If you’ve ever worked in a corporate culture, you know very well that there is a herd mentality. Here’s a demonstration of how it works,
You (at the lunch table): “Hey Steve, how many days have you taken off with this new unlimited vacation time over the past year?”.
Steve: “Well, only about 7 or 8. You?”
You: “Oh, ahem, um, 6, I think.”
Steve: “What about you, Sarah?”
Sarah: “5! Just 5…”
Your Boss (in your annual review later that day): “Mmm… Yeahh… so we calibrated your performance as “slightly misses expectations” against your peers. One of the big things we looked at was effort and “love for the job and company”. It looks like you took 20 days off this past year, is that right? Yeahhh… so I’m going to need you to go ahead and bring that down to about 8 this coming year… mmmmkaaay?”
You (to your significant other later that night): “Hey hun, sooo… we’ll have 5 vacation days to use next year.”
You see, nobody wants to stand out as the outlier and be labeled a slacker. Why? You guessed it – fear. Once the herd standard has been established, good luck thriving or even surviving outside of it. Tribune and Virgin’s statements should erase any doubt about the type of pressure applied and subtle or direct actions taken against those who maliciously abuse the perk.
Furthermore, many employers with limited paid vacation days allow employees to “accrue” those days over time and then cash them in at a later time. With no more accruing, there is no long-term payback.
5 years from now, I’d love to see a study that looks at the average number of vacation days that employees working for “unlimited” employers took. I’d be willing to bet that it is far less than 20.
Americans are overworked and we need better balance. But unlimited vacation days is not the solution. It’s a step in the wrong direction. If you’re looking for a new employer, please avoid those offering that bait.
To anyone out there who has the direct ability to influence employee happiness and balance, if you truly and genuinely want your employees to work less hours and have better work life balance, offer the following perks instead:
- flexible work schedules – e.g. four 8 or 10-hour day weeks
- allow employees to work remotely, if their job realistically permits (most white collar jobs do)
- encourage paid or even unpaid sabbaticals after varying number of years of service, and guarantee their job back, upon return
- make vacation days mandatory for employees (e.g. you lose a day’s pay for each vacation day you don’t take)
Those are work/life balance perks that people can get excited about.
Readers: what work/life balance perk would you most want to see your company adopt?
I have a friend who works at a company that offers unlimited vacation days. When he first got this job, it was one of the perks he loved the most. I told him that it’s just a trick and he didn’t believe me. About 5 years in now, I’m pretty sure he believes me because he hardly ever gets a day off, and constantly works overtime…
Another idea would be to allow employees to buy more vacation time. I would easily sacrifice a week of pay distributed over 24 paychecks a year for one more week of vacation. This is a win win for both work life balance and the corporate $$$. Plus it continues the current cute of limited vacation time with the expectation that if you don’t use it you lose it.
Some employers do allow you to buy vacation time. Not many though…
Wouldn’t this just be leave without pay?
Often, it’s at a discounted rate.
Bad trap to fall into… I very much take ever single day off I’m allowed… My work doesn’t get done and things get behind I tell my boss we need to reassess the schedule to shift things to reality.. if he doesn’t like it I always suggest hiring another counter part to keep up with the work demand..
Recently my employer is working on details for unlimited vacation.. I’m excited about it I will take all my days as I have before and then look to use a few more here and there.. Keeping my work life balance in check.. If things start to go at work because some are considered taking too much vacation.. I will take A LOT of vacation days while I am searching for a new career where Employers let employees have a better work life balance.
I totally agree with you. Corporate culture, the guilt and the need to constantly “show face” in the office is something that really starts to wear on workers as time goes on.
One idea I liked came from a company a friend worked for. They had a certain allocation of sick days & vacation days each year, but every month they were required to take a day and a half off – every single month. To me, it seems like a great way to make sure people get rested from their jobs and feel like it’s okay to take time off when they need to.
You hit the nail on the head here. Big corporate culture is all about $$$$$; they aren’t doing this stunt for “employee benefit”. You know these companies hired a top 5 consulting firm to come in, look at PTO and find just how much more they can milk their employees and make them work harder for the same salary.
Most people are so stupid.
When I first read the headlines I thought it sounded good, but then I read the statements from the CEO and I saw what was really happening.
I’m one that doesn’t leave any vacation days on the table, I take them all. And if my company changes its policy I would take the same amount of vacation + a day or two without any fear or retaliation. If they retaliate then I can just get a new job… or try to.
I agree with you on this. I thought it was amazing when I first saw it and then understood it for the PR trick it was. Regarding:
“They are only going to do it when they feel a hundred percent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business — or, for that matter, their careers!”
I don’t think I’ve ever felt 100% comfortable that me AND my team are up to date on every project in my entire working life.
Although, sometimes I did feel that my absence might actually be beneficial for the business rather than damage it!! ;)
Have to disagree here, at least partially. The picture you’re painting of this is pessimistic, it fails to acknowledge that there is potential for a upside on the part of employees.
I think some cultures actually do embrace balance and I work in one of them. People do not count your vacation days, including bosses, but they DO expect that you’re on top of your projects and work. It’s not a utopia, but the idea of taking off time is expected and bosses encourage you to do so.
This is an extension of these cultures–which leads to better work life balance. It’s a policy that treats employees as responsible adults. Blanketing the entire idea as a “PR scheme” is shortsighted in my opinion.
Totally agree with you on this.
I work for a company that doesn’t have a vacation policy, but I’m not surprised it hasn’t worked for Tribune. You can’t just change one work policy without having a complete culture to support it.
Where I work the entire culture is set up to allow it to succeed and it does in a great way. There are no peer-performance reviews at work and no individual bonuses either. The only way a policy like this works is if you remove all the competing factors that discourage people from working as a fully integrated team. Performance related bonuses are one such idea. If you keep them in place then it’s going to foster a workplace where people feel afraid to take time off. Here there is a full trust environment where management and colleagues all trust each other to do what is right for the team and company as a whole.
Agree – cultural support is big around vacation policies. At startups, this policy would go over much better than it would with a well established employer with tenured employees who have earned higher tiered time off.
The 10 hour 4 day work week sounds alluring but I think workers should request a pay increase if opting for this “perk”. The same productivity if not more will be expected of you.
I wouldn’t mind seeing 100% employer-paid medical insurance w/o a reduction in pay. But I guess that would be dreaming too.
Very interesting. The fear that we all seem to have of our employers is just so toxic, yet pervasive! It occurs to me that so much about working in an office is politics and not actual work. It’s one of the reasons why I look forward to retiring early so much–I’ll be happy to work hard for myself, but I dislike doing it for someone else.
This is not an employer problem but an employee problem.
Employees should be focused on how much quality work they deliver, not the number of hours worked or # of days in the office. Those are two very different things.
I started working for Northwestern Mutual in 2007 and got 21 days PTO my 2nd year. I’ve rolled over 1 single day of PTO in my 7.5 yrs there. I’ve been promoted twice. I work with plenty that take only 5-10 PTO days/yr and they’ve not been promoted more frequently.
Please quit spreading all the “corporations are bad/evil/etc” crap. Its individuals, not companies that are the underlying problem.
If you’re going to look at quality work delivered rather than hours put in, then isn’t it fair for employers to use the same standard? Shouldn’t they let an employee take the rest of the day off if they get their work done in 4 hours? There are many office jobs where the majority of people do only a few hours of actual work, yet they are expected to put in a full 40 hour work week.
I think the root issue just has to do with choice. The standard 8 hours/day, 5 days a week, 2 or 3 weeks vacation shouldn’t be applied blindly to everyone, regardless of their job. There should be a lot more adoption of flexible schedules, telecommuting, and longer vacations, perhaps with less pay.
That’s pretty much how it works at my employer. They don’t track the number of hours I’m in the office so they don’t track the number of hours I’m out of the office.
There are expectations on the amount that you deliver and the quality that you achieve. How you manage you own time is up to you as long as you are consistently delivering what is required of you in the timeline the group/business needs it.
It’s really about making sure the entire culture is set up to trust the employees to get the work done with high quality. Trust that they can manage their own time in the most productive way and that it won’t negatively impact others.
I’ve had loads of people respond when they hear that with the question of what’s stopping me taking an entire year off. Well that’s simple a) I don’t want to screw over my coworkers and b) My productivity would quickly drop below what is expected of me and my employer would just let me go. Trust is a two-way street and when it works it can be really great.
What is an employee problem? Asking for and taking vacation days?
Quality of work already has enough implications in the office – promotions, raises, new role opportunities, etc.
Could not agree more.
Oh totally agree on this one. It’s the biggest scam in Silicon Valley right now and my pet peeve. Here are a couple of other ways in which it sucks.
– Say you work work work and don’t take any vacation time and then are laid off, fired or quit. Earlier you had your accrued vacation that could be cashed out so at least you got some money for your time. Now, nothing, zilch
– You take time off for disability, sickness, maternity, paternity leave. Most work places don’t pay out your full salary during this time. So with the previous paid vacation you could use that to pad the gap. Now again, you can’t do anything about the difference.
– In most places that have paid time off, the amount you accrue increase with tenure. Now it’s the same for everyone, there is no accounting for the fact that you worked your butt off and never took a vacation the last year. It’s all up to how much time your boss thinks you are entitled to nothing else.
All this is possible only because the US is one of the few countries in the developed world that allows corporations to not offer any paid time off. So companies resort to these tricks which are essentially accounting tricks to keep money from being tied up in paid time off accounts.
#2 is one I hadn’t even considered, but is definitely legit. Good comment.
Agree that eliminating liability is actually why companies are trying this. Sneaky way to reduce an already inadequate benefit. So vacation is totally discretionary? Even worse than plans combining sick and vacation time, effectively eliminating sick leave.
I have to manage a few associates at my company and I recently found out that a good number of them have not used ANY vacation at all this year, and the company only buys back 5 days max! I’m not sure what these people are thinking because they literally are wasting their life working. I love my job and take every vacation day I can get my hands on, and then some!
Spot on assessment my friend. Show me someone who can get approved for unlimited vacation days and I’ll be the one to pay for the vacation.
Interesting post Mr Miller. I’m based in the UK and wherever I’ve worked I found that nearly all employees take their entitled holiday quota. I’m not sure why its so different here. I’m can understand why employees don’t want to take their full allotted holiday as this might seem like a negative thing as there are hundreds of replacements available. However I think employers need to encourage employees to take their holiday entitlement as it prevents burnout which will be detrimental to the company in the long run. Great post, thanks for sharing.
Wow! Hadn’t heard of this new “trend” yet. It sounds awesome, but then once you actually analyze it I bet you are right. It’s awesome in theory but not in practice. My current FT employer reauires us to take off 5 days in a row (1 full work week) at some point every year. Again this sounds nice, sounds like they are encouraging a vacay, but really we have to do this so they can make sure we aren’t stealing or laundering money (the theory is that if we are it would show up while we are away from the office). It would be better if I earned more than 8 days of PTO/year, meaning I have only 3 to spend outside of that required 5 day period.
I disagree…I work at a software company, who calls it FTO (Flexible Time Off). It’s all about accountability. If you’re getting your work done, you deserve a break. I took about 6 weeks off last year and was a top performer. Work hard while you’re in the office and you’ll be trusted to manage your own time. Slack off, and well…you might find yourself in the office more than others.
I work for a GE, and they just started the “flexible” vacation. For those that were already feeling stressed by not taking their earned vacation – their stress will only increase.
For me personally, I’ve got >20 years in, and made it to 5 weeks of vacation and there’s no chance I’ll get that under the new system.
This stinks because people used to know that they HAD vacation, and personal time they were “supposed to use”. Now, it’s a matter of asking your manager when you want to take vacation — read that begging, justifying, worrying MORE when you ask.
GE just squeezed millions of labor hours out, and $millions.
My husband’s company just adopted this policy. We will see if it works. My only question is what happens to that accrued vacation time? Shouldn’t it get paid out to the employee?
My company has the discretionary time off policy. Here “discretionary” means they can cancel your days off at any time, so even if your manager OKed your vacation months ahead of time, it can be yanked at the last minute. Don’t want to cancel? Then you’d better drag your laptop along, because they expect you to work from your hotel room, lake cottage, or beach-side condo.
Unlimited holiday is a sham. I have seen Vps take 7-8 weeks holidays with only few to question them whilst most employees at mid level or entry level take on average 10-14 days. A few abuse the system consistently being sick and others have to sacrifice holidays to manage work load. Other than being sick, holidays are frowned upon and I have to justify my vacation. There is an overarching desire to outperform each other and people do make comments on holidays taken and the known slackers except if one pretend to be sick. If you care for your image and nto want to be branded as a slacker, then you will have only about 10 days holidays. This article is right on fear and if you have a workalcoholic boss!!
Vacation hours take away from”billable” hours in my company. Already, anyone taking more than minimum days is seen as “not committed” and it is reflected in reviews. I’ve seen the industry change over the years and it’s all about short-term bottom line these days.
Forget buying vacation time, I’d rather sell it. At least then I could get something for it.
My company just sent a global mail out that we have just switched to DTO, without HR really even discussing it with mid-level mangers first. I have a good manager who I also knew previously for many years as a colleague at our previous employer. So at this time, I don’t really have concerns, but what if I end up under another manager? This feels like just a cynical attempt by HR to take advantage of our tendency to be competitive and get us to take even less time away from work. I’ve ALWAYS taken every single day of PTO, because I consider it to be part of my compensation, and this policy change is happening a few months before I was scheduled to get an additional 5 days of PTO per year. Now it feels like even if I take no more than I have previously, it can be framed in such a way as to make me look bad.
It’s really just an accounting trick to get accrued vacation off of their balance sheets. That’s the bottom line, literally.
I looked at introducing an unlimited PTO policy for my employer a while back. There are tons of benefits for the employer because you no longer have to accrue holiday not taken/pay it out when employees are let go. There are also admin/accounting/ HR savings. For an employee, it can only work well if the comp structure is highly objective (i.e. hitting specific sales metrics) or the compensation is primarily salary based. Everything else will leave you short-changed.