To employees carefully portioning out their meager vacation days as the year begins, Sharon Rosenblatt sounds like she has it made. She describes her Maryland employer’s policy as “As long as you get your work done, it doesn’t matter where you do it.” That means total flexibility — including unlimited vacation days. Sounds like a dream, right? Maybe. But it could also mean losing some cash — and your sanity.
Rosenblatt’s employer, a consulting firm, is not alone in its flexible vacation policy. The website WeddingWire made headlines last week for offering its employees an unlimited vacation policy. The Washington Post asked, “Is this the best employer in Maryland?” Fortune reported last year that unlimited vacation policies are becoming a bona fide trend. Companies including Netflix, IBM, Morningstar, and the New York consulting company BlueWolf have implemented versions of the policy, sometimes called a “results-only work environment.” The strategy’s advocates say it makes employees happier and increases productivity.
Former Best Buy HR manager Cali Ressler and Jody Thompson, who developed the strategy at their former employer, started their own company, CultureRX, to help other companies make a results-only work environment work for them. “A ROWE workforce is more efficient, productive and loyal to the organization while also feeling satisfied, fulfilled, and in control of their personal and professional lives,” the pair write on their website.
The benefits of unlimited vacation to employees are obvious. As Christina Gomez, a lawyer in Denver, pointed out at a recent audio-conference on the subject for HR professionals, unlimited vacation boosts morale and creates “a culture of mutual respect, responsibility, and high performance.”
But unlimited vacation policies can also give an employer a reason to withhold pay and shrink a workforce. Yes, productivity sometimes rises — Ressler and Thompson say by up to 35% — but it’s more than that. As Gomez points out, in most cases the strategy releases employers from the obligation of paying out for unused vacation time when an employee leaves. If you don’t use your vacation, you really lose it. Employers also save money on administrative and accounting work. All that time counting up sick days and hours isn’t free — but with unlimited-leave policies, it disappears.
Many employees with unlimited vacation love it, of course. But others can feel as if the “unlimited vacation” really means “no vacation.” And if there’s no official, designated vacation time, are you supposed to be plugged in even when you’re in Hawaii? Will your coworkers give you the stink-eye when you take off, even if you’ve covered your duties?
Rosenblatt, the consultant in Maryland (she’s technically an independent contractor), jokes that the policy has caused her to suffer from “self-diagnosed workplace paranoia”:
I took over a week off in December for a vacation [on top of standard holiday time off]. While I cleared it by my coworkers, I still had these feelings of guilt. I think unlimited vacation is great if your work allows for it. Yet, I always feel pressure to work even harder when I get back, even if there isn’t more work.
It turns out that unlimited vacation comes with its limits.
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