Unlimited vacation is an increasingly popular benefit among startups and high growth companies. In theory, the benefit gives employees more flexibility with their PTO and entrusts them to manage their own time. While the promise of unlimited vacation still dazzles many, there has recently been much skepticism around the effectiveness of these plans.
Many articles have theorized that employees with unlimited vacation plans actually take less time off due to guilt, internal competition, or intense company work culture. In high pressure startup environments, it can seem like there is never a “right” time to take a week off.
In Namely’s HR Mythbusters 2017 Report, we dug into our own data to see whether employees are really utilizing their unlimited vacation time—or if they are getting the short end of the stick. So what did the numbers reveal?
What We Found
We took a look at all of the personal time off request data for 2016, and then segmented those requests by unlimited versus traditional plans. The results reinforced the concerns of unlimited vacation skeptics: employees with unlimited vacation plans take an average of only 13 days off per year, whereas traditional plan employees average 15 days annually.
The data proves that on average employees with unlimited PTO plans do in fact take less time off than employees with a set amount of vacation days. This calls for a change in the way HR teams and managers communicate about time off.
What This Means for HR
Unlimited vacation is still an attractive benefit to recruit and retain employees, but the data speaks for itself. It won’t take long for employees to feel the burnout associated with underutilized PTO. With this in mind, companies who offer unlimited PTO should work to change the conversation around vacation time and facilitate an environment where time off is encouraged.
Vacation time has been proven to increases employee productivity, engagement, and retention—but only if the policy is actually utilized.
How do you encourage employees to take time off? Here’s where to start:
- Engage Managers: It’s critical that managers lead by example. If direct reports see their managers taking a normal amount of vacation time, they will feel more comfortable to take time off too. This example-setting should start from the C-suite and work its way throughout your organization.
- Eliminate the Guilt Factor: Demonstrate a genuine interest in employee vacations. Perhaps you encourage them to share vacation photos in company gear or talk about their latest adventure at company meetings. This removes any guilt and creates a space where employees can talk openly about their time off.
- Start with the Culture: Time off is just one way to show appreciation for hard work. Build a culture that makes employees feel valuable and appreciated, from regular shoutouts to awards for top-notch work.
- Offer Vacation Incentives: If your company is able, consider offering travel stipends, sabbatical bonuses, or other fiscal programs that go the extra mile to encourage employees to get away from the office.
When thoughtfully implemented, unlimited vacation can be mutually beneficial to employers and employees alike. Keep an eye out for underutilized PTO and burnout in your employees, so that you can act fast to ensure your culture supports healthy work-life balance for all employees.