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The catch of having an unlimited vacation policy

Logan Mock-Bunting

It's mid-August. Congress is in recess. The president is on Martha's Vineyard. And judging by the pictures on Facebook, seemingly everyone is at the beach.

Except you. The two weeks of vacation you're granted by the sticklers in H.R. have already been used--or reserved--for the kids' spring break, a long weekend earlier this summer, the holidays, and doctors appointments or cable-guy emergencies. Right about now, those unlimited vacation policies sprouting up at more and more companies are starting to sound pretty good.

But are they? While some companies have offered such policies for years, a growing number of firms--particularly young tech outfits--have joined the club and are now offering unlimited vacation policies. Or put another way, no vacation policy at all. At companies such as Netflix, Hubspot and Evernote, employees can take what they want, when they want it--as long as they get their work done, get the time approved and get things covered while they're away. In a sense, they're treated like adults, trusted to take whatever time off they need if they're able.

That all may sound like a paradise, but my guess is it won't work just anywhere. Yes, there's the chance that employees could abuse the policy and take too much. But just as worrisome, if not more, is that when there's no clear guidance on how much time off is okay, people could actually end up taking less. Combine a sputtering economy that has people concerned about their jobs and any workaholic managers, and you could be left with a workforce uncertain enough about what's acceptable that they leave even more time on the table than their peers who have traditional vacation policies.

Some companies that have adopted unlimited vacation time say they're aware of this possibility and tried to account for it. Investment research firm Morningstar hasn't tracked vacation days since the company was founded nearly three decades ago, but says individual managers do make a note of it and encourage their team members to take at least three weeks off.

At marketing software firm Hubspot, COO J.D. Sherman refers to the vacation policy as "two weeks to infinity" in order to clearly communicate that employees are expected to take at least two weeks off, though "the policy is designed to be leveraged," company spokesperson Katie Burke told me in an e-mail. She says Sherman uses message boards to urge employees to let him know personally if they have an issue with their manager or feel their job is too busy to get away.

Meanwhile, software maker Evernote, which also doesn't limit employee vacation days, actually gives a $1,000 stipend to anyone who takes an entire week off in order to encourage vacation taking. If you don't take a solid week off, you lose the bonus. Spokesperson Ronda Scott said in an e-mail that "I suppose if you had an anti-vacation manager, even the stipend might not be enough to get you away from your desk," but it hasn't been an issue. "Not trying to paint Evernote as some sort of Shangri-La, but it's a part of the culture that time can be taken as needed and as appropriate and I don't think we've had that problem."

Treating employees like adults and trusting them to get their work done without burdensome rules is a good idea. But vacation nirvana also comes with an asterisk. To get past any wariness about what's acceptable and what's not, many people will still need some kind of guideline about minimums or an incentive that shows how much the company supports vacation. Most of all, they need to see examples set by the people who lead them. If senior managers take off for three or four weeks each year and don't seem to stress over it too much, the people who work for them won't either.

Jena McGregor is a columnist for On Leadership.

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