Summer is the busiest travel season of the year. With kids on summer vacation and warm weather nationwide, hundreds of thousands of employees are taking time off to visit new places.
Despite so many people taking off work at once, the economy never collapses and organizations keep humming along. Which got us thinking about one of the newest crazes in company perks: unlimited vacation policies.
Are they a good idea? Or is the old model of 2-3 week restrictions still ideal? Read on to find out.
Pro #1: It Increases Employee Happiness
A 2017 report from Gallup showed that 53 percent of employees rank having a job that allows them greater work-life balance and personal well-being as “very important.” Giving employees complete flexibility over vacation schedules is the quickest way to appease this wish.
Con #1: Employees May Abuse the System…Or Get Abused by It
The verdict is still out on what type of companies truly benefit from unlimited vacation policies. Some employees can’t handle the unlimited time-off and abuse too much of a good thing. This leads to lost production hours for the company.
And on the flip side, many company cultures are so cutthroat that flex time is viewed as a weakness that sets careers back, so employees actually take less time off than they would if prescribed a set amount of days.
Pro #2: It Can Cut Costs
Traditional vacation policies result in accrued unused days off at the end of each year. And when an employee quits, gets laid off or retires, the company has to pay out these unused vacation days. Contrast this to companies with unlimited vacation policies that don’t have to carry any liability on their books for unused time off, and the difference is staggering. According to the U.S. Travel Association, this has the potential to save companies $1,898 per employee.
Con #2: Vacation Days Can No Longer Be Used as a Reward
Long-tenured employees may not take a liking to unlimited vacation policies. They spent years, and sometimes even decades, working hard to build up extra vacation days, and they viewed their surplus as a badge of honor. When the playing field is leveled and new employees are granted the same number of days off (unlimited) as everyone else, morale can take a hit.
And if companies can no longer offer an extra week of vacation in exchange for continued employment, there is one less negotiating chip on the table when an employee considers leaving for a new opportunity.
Pro #3: It Can Help Attract the Best Talent
According to a brand new survey from MetLife, the Los Angeles Times reports that unlimited vacation is now the #1 benefit workers want. Your company can use this insight to their advantage when recruiting talent. In fact, research from Glassdoor shows that nearly 80 percent of workers prefer additional benefits over income increases. That figure grows to 90 percent with millennials.
Con #3: You Have to Trust Employees to Manage Their Projects Accordingly
Offering unlimited vacation can backfire if you don’t have policies and procedures in place. Without structure, companies open themselves up to being burned during the busiest times of the year. When vacation days are capped, there is a safeguard in place to protect against people being out too often. Managers will need to communicate more heavily and set clearer expectations when the safeguard is removed.
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