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Pros and Cons of Unlimited Vacation

Better balance or a risk to your reputation?

The United States is the only advanced economy that doesn’t require employers to provide any paid vacation. And in our fast-paced, multiscreen world, many people don’t feel comfortable unplugging from work. In fact, most Americans don’t take all the vacation time they have, says Denise Rousseau, professor of organizational behavior at Carnegie Mellon University.

Some people feel that unlimited vacation solves that perennial problem—while others say it just introduces new complications. 

The jury’s still out, but one thing is clear: Take your vacation every year. It’s good for you and for the company.

Pros

1. Unlimited vacation helps you stay balanced. No one believes that work is relegated to the workday. “People are routinely answering emails on weekends and at night, but the traditional approach to vacation has stayed the same,” says David Almeda, chief people officer at Kronos, an HR and payroll software provider.

Giving people the opportunity to take time off when they need it can compensate for how much of our “non-work” lives we spend working. At Kronos, which implemented unlimited vacation in 2016, employees now take up to 18% more time off than before.

2. It helps attract talent. That’s especially true for younger people who have fewer family commitments and more time to travel, write a book or shoot a movie, Rousseau says. “It’s a way to signal you’re a cool employer of choice,” she adds.

It also appeals to more experienced employees who’ve accumulated several weeks of vacation at their previous jobs but then move to a new gig and have to start over with two weeks off. Unlimited vacation gets everyone on equal footing, Almeda says.

3. No more hoarding vacation days—or losing them when life intervenes. Imagine you’ve saved up vacation days for that big trip overseas. Then your parent or child falls ill, and you have to use all that time to tend to your loved one. Unlimited vacation allows you to take the time you need for both vacation and personal needs, without penalizing you in either area.

“If working here is more important than family, then your priorities are screwed up,” Almeda says.

Cons

1. If companies take “unlimited” to mean “unmanaged,” the plan will go haywire. Unlimited vacation is not just that you can go whenever you want. You still have to ask,” Rousseau says. Look at your upcoming deadlines and work with your manager to make sure the team’s covered while you’re out.

Moreover, companies must look closely at how their managers approve vacation time. It requires communication and transparency so everyone knows what everyone else is up to, Rousseau adds.

2. Employees typically see unused vacation hours as money they will receive if they leave the company. If unlimited vacation isn’t a paid benefit, employees could view it as a perk for the company and not for themselves. “Employees wonder, ‘Did you do unlimited vacation to give us more time off—or to save money?’” Almeda says.

Kronos took the money the company saved from not having to pay out untapped vacation time to fund various employee benefits, including student loan repayment assistance and a scholarship fund for children of employees.

3. Unlimited vacation can make others question your commitment. People can ruin their reputation by taking too much time off, especially if they’re new to a company and haven’t yet proven their worth.

“It runs the risk of undermining employees’ standing with their boss or co-workers,” Rousseau says. That can be felt when it comes time to get a raise or promotion (or not). So employees have to navigate the appearance and politics around how much time they take—which isn’t the case when everyone gets a fixed number of days off. As a result, you might not feel comfortable taking vacation at all.

Photo by Abrams/Lacagnina