Is Unlimited Time Off The Next Big Thing or Destined to Fail?

Debating Unlimited Time Off: The Next Big Thing or the Doomed to Failure?


Unlimited Time Off
Unlimited Time Off

This idea of unlimited vacation time for employees has gotten a large amount of media coverage during the daily news cycle. Obviously this offers attractive headlines. If people think unlimited vacation time is in their future this is a reason to get excited. Without fully understanding the implications of such a policy this sounds great to people.

This also allows human resources to save time by no longer having to follow vacation or leave time. Despite the media coverage, less than one percent of companies currently offer an unlimited vacation time policy. While it remains to be seen whether this will take hold of major players, like anything this idea has its positives and negatives.


First, the Positives

This idea initially took the media by storm when billionaire Richard Branson discussed this topic at length. Branson is the high profile CEO of Virgin Group, which installed an unlimited vacation policy for its people. This followed a similar decision by media streaming giant Netflix.

The only qualification for taking time off is to ensure the employee is completely caught up before they leave. The people singing the praises of this policy believe that employees will manage their time around this tenet because the best interests of the company are in line with their career prospects.

In addition to these giants, some popular start-ups are also attracting employers with unlimited vacation time. These start-ups are seeing positive results from it. In addition to another innovative culture ideas, these companies center every policy around ensuring employee health and positive lifestyles. If employers show more faith and trust in employees to manage work and time on their own, this likely will lead to a smarter, happier, and therefore productive company.


The Positives
The Positives

Furthermore, with unlimited vacation time, there isn’t the added administrative expense of managing the vacation days for so many employees. This allows the human resources department to shrink or focus its energies elsewhere.

Furthermore, the company doesn’t have to buy back or allows employees to roll over or store unused vacation time. This saves the company a substantial amount of money. Finally, employers don’t see a rush from its employees at the end of the year to use all of this vacation time. This doesn’t leave the other employees still at work struggling with the mountain of to dos at holiday time.

Now, the Negatives

Without a doubt, the idea of unlimited vacation time is not for every company. While the human resources department can save time by not worrying about vacation days, they also create other challenging issues. Administrators are now stuck tracking employees who are taking leave under the unlimited policy as well as the Family Medical Leave Act.

This is because leave under the FMLA act is protected under federal law, whereas other employees can be fired for taking an inordinate amount of vacation time that causes the company to suffer if not protected under this act.


The Negatives
The Negatives

Furthermore, it can be a challenge for companies to figure out just how “unlimited” this new policy is going to be. If the definition of such a policy is subjective, this leaves the policy open to employees abusing the new benefit and exceeding what makes sense.

In addition, what’s excessive will likely change based on the workload the company as faces. Therefore, it is important for employers to make clear the expectations of the employees on a regular basement commensurate with workload. This will prevent people from abusing the policy and decrease employee turnover rate.

In addition, certain large companies aren’t structured properly to have a such a policy. Factories and large plants that rely on assembly line workers are unionized and have large numbers of hourly employees. Therefore, paid vacation time is a rarity and unlimited vacation time doesn’t make sense. This is because hourly employees rarely get paid if not present.

Furthermore, unions throw a large administrative wrench into the implementation of such a policy that changes based on some subjective level of measuring the company’s workload. Finally, many of these employees are elderly and unlikely to adapt to unlimited vacation time as well as the younger generation will.


Final Verdict
Final Verdict

Next, many employees are likely to become upset if certain employees are allowed to take more vacation time than others. Since some employees are more efficient than others, in addition to have different demands outside of work than others, it only makes sense that some people will take more time off than others. It doesn’t mean people won’t become upset when the amount of people’s vacation days isn’t uniform across the company or based on some degree of experience.

The Verdict

Like any new policy, it is important to take such a drastic change on a case by case study. What’s best for some companies isn’t necessarily right for others. It is important to take stock of both the company’s field and the abilities of the employees before changing in such a way. Just as importantly, employee record-keeping is key for anything time-off related in a business. The best practice you should adopt is having sound employee vacation request forms at hand.  They simplify things from several HR angles.


Article provided by Neches FCU, an Equal Employment Opportunity Employer.
Neches FCU is a trusted Texas credit union and has a superior team of staff ready to provide services to members.
When its doors open at any of their 9 locations, the goal of “Ultimate Member Satisfaction” becomes the imperative for every representative.

Read More