Unlimited Vacation: It’s not about Vacation it’s about Performance

In our experience, the main factor in determining the success of an unlimited vacation policy is how aligned the employees are to the performance of the company and the level of trust and commitment that exists.

As with any policy, unlimited vacation has to work for your business and it is not for everyone. We prefer the term ‘open vacation’ as there really isn’t anything that is ‘unlimited’ — there is a point where too much time off has a negative effect on business. With proper execution plus leadership that invokes trust and autonomy, there are more upsides than risk. Here’s why.

Unlimited vacation reduces the company’s vacation liability; and administrative overhead. Basically your accounting team will love you.

There are rules. Unlimited vacation policies are like regular time off policies. They have documented guidelines for how to request time off, how to approve time off, and how to communicate with anyone impacted by the absence. Good communication is key to the success of an unlimited vacation policy.

They need to be managed. Unlimited vacation time still needs to be tracked when people take time off. Why? Because in some provinces you must be able to prove your employee’s have taken their legislated two (or three) weeks annual vacation. Plus, you will want to manage how many people are away at any given time.

Do employees abuse unlimited vacation policies?

Because unlimited vacation policies do not specify how much time an individual can take off, the biggest fear employers have is what if employees abuse the policy? Meaning, what if they take too much time off?

It’s actually a really simple answer. If an employee abuses the policy you will observe either a decline in their performance, or an interruption in other people’s ability to perform. Or both. All of which impacts the business as a whole. If this happens you don’t have a vacation policy problem you have a performance problem.

If quality or quantity of work is affected, then performance management discussions need to happen. In unlimited vacation environments people are accountable for their work, not their time. It is a policy created on the basis of accountability which is culturally inspiring and empowering. It implies trust and autonomy, personal qualities you want in top performing individuals.

The reality is, most employees are not looking for ways to jeopardize themselves or the company. They will not take time off at critical moments; they know when they need to show up and when they can step away. For those who don’t, they may not be the right fit for you or may need a more structured vacation program.