How to navigate the unlimited vacation landscape

Compensation & Benefits

Unless you live under a rock, you may have heard of the new benefit trend taking the North American corporate world by storm: unlimited vacation days. While this concept originally took off in the United States, it has now started to make its way to Canada with companies like Miovision, EllisDon, RL Solutions, and Karos Health all offering their employees unlimited time off.

The concept is simple enough to understand; employees have no limit on the number of days they can take off in a year. This means companies are now focusing on the quality of work being produced instead of the quantity of hours employees are putting in.

While this may seem like a dream come true for employees, it has employers scratching their heads wondering how this benefit works logistically. The concern is whether or not employees will abuse the privilege and if it brings tangible benefits to the employer. Is this right for your company? Here are some suggestions to help you navigate the world of unlimited vacation.

Unlimited vacation as a recruiting tool

Having unlimited vacation days on your roster of employee perks is a great way to attract top talent. Most HR managers or recruiters will tell you employees generally try to negotiate two things before accepting a job: vacation time and salary. By offering unlimited vacation days up front, you’re eliminating the need to negotiate and keeping everyone happy.

Mammoth, an HR Technology company, offered unlimited vacation as a test for one year. They found it ranked in the top three benefits employees received from the company (beaten only by a 401K program and health insurance). Interestingly, they found employees took off the same or only slightly more days than they did when vacation days were set. Proving an unlimited vacation policy gives you competitive advantage without costing you much more than your current vacation policy.

Unlimited vacation can save you money

Speaking of saving money, having an unlimited vacation policy can do just that. Unused vacation days are rumoured to cost Canada $6.3 billion dollars every year, yes that was billion. Between employee burnout from not using the days, or companies being forced to pay out unused days when an employee quits, it still costs you. By implementing unlimited vacations, there is no accrual of days and therefore you are not obligated to pay out an employee upon termination of contract.

Family visiting Paris, MontmartreUnlimited vacation shows you trust your employees

You’re not running a daycare nor are you a babysitter, so why should you act like one? Your employees are adults who were hired to do a job. Letting employees take off time when they need it is the best way to show you respect and trust them. There may be rare cases when an employee abuses the unlimited vacation privilege but when they do, there could be a hidden meaning behind it, such as an intent to quit. If an employee is willing to abuse your trust, perhaps they weren’t a good fit to begin with?

Setting ground rules for unlimited vacation

Several companies who have already initiated the use of unlimited days off have warned that you need to define the boundaries. Having a limit on the number of consecutive weeks an employee is allowed to take at a time is a great place to start. Some companies cap this at two, others at three consecutive weeks. Figure out what works for you and communicate it to employees clearly so they understand. Advising employees that they need to give the proper notice before embarking on their next adventure is also important. This will allow managers to prepare for and be able to track where their team will be at all times for better workflow management.

Always remember the CEO sets the example for employees, so she should be taking a certain number of days or weeks every year as well. Some companies found that employees were actually taking less days than they were when the days were clearly laid out. Set a minimum number of vacation days employees must hit and make sure the CEO or President is following that set standard as well.

While it may seem like a lot of work initializing this new benefit, as you can see there are many benefits in doing so. With the right strategy, outlines, and support from your team you too could give the gift of ‘unlimited’ to your employees.

See also:
Why you should pay your employees to go on vacation

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