More Vacation, More Problems?

Jul 10, 2013

The Society for Human Resource Management’s 2012 Survey says that one percent of US employers offer unlimited vacation if you get your work done, including big companies like IBM and Netflix, and smaller start-ups like Seattle’s Social Strata, a tech company focused on social media applications.

According to Rosemary O’Neill, president and founder of Social Strata, three years ago the company ripped out about half the pages of their policy manual and decided to offer their employees what she called full-on, no-strings-attached, unlimited paid leave. As long as employees completed their work and helped the company achieve its corporate goals, they could decide when they were on or off-duty.

The idea was born when the company’s COO needed time off to take care of her husband after an accident. O’Neill discussed the issue with her husband, who also runs the company. “Well, obviously, we are going to let her do that,” O’Neill said. “And the more we talked about how much we trusted her to get her job done and take care of her family, we decided that we felt that same way about our whole team. And hey, crazy idea, why don’t we just extend that same respect and courtesy to everybody?”

Hey, crazy idea, why don't we just extend that same respect and courtesy to everybody?

She said that there was disbelief and shock among the employees when the new policy was first announced, but then O’Neill said that they took it in the spirit it was intended and that it has been a success for the last three years. “I don’t regret it a bit,” O’Neill confirmed.

While the company does make note of when employees are coming and going, O’Neill said that the purpose really isn’t about safeguarding abuse. “We do track when people take days off just to make sure everything’s going okay,” she said. “But the primary thing that we are tracking is are our customers happy? Are we thriving as a company? And that mean’s business-wise and people-wise. We’re very interested in investing in our human capital.”

The primary thing that we are tracking is are our customers happy?

O’Neill said that she has not compared the amount of vacation employees are taking now versus how much they were taking before the policy change.

There is one requirement for Social Strata: employees must take at least two weeks of vacation a year. O’Neill said she wanted to avoid people trying to outdo themselves or creating a competitive culture of who could take the most or least amount of vacation.

Kevin Martin, chief researcher and marketing officer at the Institute for Corporate Productivity, said that success for this policy largely hinges on each company’s culture and management.

It’s a horrible idea unless your company absolutely buys into it at the top; and implements the policies and practices and has the resources to make sure that when employees do take time off, they can do so without a guilty mind and not looking over their shoulder; and ensures the least amount of disruption to the company as possible.

According to Martin, companies don’t necessarily need such radical vacation policies. Sometimes it’s the small things that make a big difference.

One of the things we’re seeing that’s big within companies and is a real key driver – and this is research we’ve done with some neuroscientists – is managers, instead of just giving extra paid time-off day here or there that someone may or may not use, saying, “Take five minutes, just walk around the block and clear your head. You’ve been in meetings for three hours, your creativity is dwindling.” Managers being able to reinforce and promote that is really essential.

For O’Neill, the point is simple. “I’ve always truly believed that happy employees make happy customers,” she said.