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Phoenix Forward

Is unlimited vacation good for business?

Time off benefits employees and companies

Imagine a world in which companies have no vacation time limits and let employees take time off whenever they want, for as long as they want, provided they get their jobs done. It’s actually not imaginary — a growing number of companies are now offering unlimited vacation time as part of their employee benefit packages. But is it too good to be true?

“Unlimited vacation policies have become a trend because companies are no longer able to offer the highest-level monetary compensation [due to the economy],” says Tony Di Gaetano, a retired human resources executive and area chair in the University of Phoenix MBA program. “They’re doing it to attract the best employees, but whether you can actually take that unlimited vacation is another story entirely.”

Having the option of unlimited vacation is nice, but today’s lean workforce can make the policy difficult to put into practice, according to Di Gaetano. “When salaried employees are out of the office, there usually isn’t anyone else covering their work, so it just piles up,” he explains. “That serves as a deterrent for both employees and bosses when it comes to vacation time.”

On the flip side, Di Gaetano explains, there is also potential for employees to abuse the policy and take too much time off, causing their work — and the bottom line — to suffer.

“Whether or not unlimited vacation policies can work really depends on the company culture,” argues Antonio Vianna, a human resources consultant who teaches business and management courses for University of Phoenix.

“Highly profitable companies like Patagonia have had policies like this in place for a long time, well before they became trendy,” Vianna says. “The policies work because they are symbolic of those companies’ mature, open and transparent culture.”

For these kinds of policies to work globally, companies must make a strong commitment to hiring only those people who share the corporate values, Vianna points out.

Unlimited vacation policies have become a trend because companies are no longer able to offer the highest-level monetary compensation [due to the economy].

The policies “require very mature, productive and disciplined employees,” he says. “Otherwise, you’ll have too many of them taking unfair advantage.”

Regardless of company culture, however, today’s work styles frequently require employees to be “on” 24/7, responding to emails and conference calls outside of traditional work hours and even taking work along on vacation. This is especially true of younger workers, who see fewer boundaries between professional and personal time, according to Vianna.

“Generations X and Y are accustomed to working around the clock,” he notes. “That makes it even more important for them to take time off and totally unplug. Otherwise, they’ll get burned out, and the quality of their work will suffer, which doesn’t help the company.”

Vianna believes companies that adopt unlimited vacation policies generally do so for the right reasons, and not as a cynical tactic to reduce vacation time.

“Most successful companies understand that employees who take long breaks come back more refreshed, and therefore more productive,” he says. “That benefits everyone involved.”

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