For all the demands of working at a startup or high-growth technology company it would seem there’s no time for vacation. Yet, paradoxically, many companies offer unlimited time off.
The perk is part of an escalating benefits war among tech firms trying to recruit top talent. Typically, employees are allowed to take as many days off as they want, so long as they work it out with their manager.
The benefit has not been universally embraced, however. When Chicago’s Tribune Co., parent of the Los Angeles Times, tried implementing an unlimited vacation policy last November its employees and their labor union balked, pointing out that the newspaper company stood to benefit by not paying some employees for untaken time off. The Tribune Co. later reverted back to a defined vacation plan.
Still, many startup and tech executives swear by the policy and insist it is good for recruitment and employee morale.
We spoke with several L.A. tech executives about establishing and managing unlimited vacation policies: Rob Salvatore, chief executive of online creative crowdsourcing agency Tongal of Santa Monica; Kyle Hill, chief executive of in-home senior care management website HomeHero of Santa Monica; and Liz Liu, senior manager of people operations at mobile game studio Scopely of Culver City.
Question: Should vacation time be defined, so that employees understand how much time off is appropriate?
Salvatore: Fast-growing tech companies thrive on fluidity, so why should vacation be any different? Rarely is anyone completely unplugged these days, and unlimited policies allow the company and the employee the flexibility necessary to account for this new workplace reality.
Hill: Startup culture is about striking a balance, and it’s different for everyone. Some people are fine with two to three days off a year, while others need two to three weeks. Regardless, I think it's extremely important to encourage your employees to travel, seek new experiences and spend time with family and loved ones. When you’re away from work you get fresh perspectives and ideas that you wouldn’t always find while working.
Do you offer unlimited vacation?
Salvatore: Yes, Tongal takes the approach that employees have the support of their colleagues and know what they need to do to stay healthy and be productive.
Hill: Yes, all HomeHero asks is they communicate absences effectively with their team far in advance and make sure they have ample coverage. We employ very hard-working, self-motivated individuals who, frankly, probably should be forced to take vacation time more frequently.
Liu: Yes, Scopely offers unlimited vacation. … Because the focus is on delivering in our results-driven environment, each individual is trusted to manage their work and time and set proper expectations with their manager and team.
Should companies with unlimited vacation policies compensate employees for untaken vacation when they leave?
Hill: In regards to time off, we do not pay employees for accrued vacation. We do not want vacation days to be something that is discussed or leveraged internally. This is because we have not identified a clear number of vacation days that are optimal, so it’s hard to reward employees for going over or under.
Liu: In the same way we don’t penalize employees who take more than the standard number of vacation days, we don’t reward those who go under. We think both practices would have the same effect of discouraging employees to take time off, which we believe is important for employee satisfaction and well-being. Scopely recently implemented a policy where managers ensure employees take a certain amount of days off to encourage proper vacation time.
Do you see any problems with unlimited vacation policies?
Hill: Similar to free food and drinks in the office, I think the system works as long as it is used in moderation and not abused. We pay much closer attention to mental and physical health of our employees than their time at or away from work. I think that for companies who have problems with unlimited vacation policy it is probably more of a reflection on the quality of their employees than the policy itself.
Liu: The reality of working in a startup or a rapidly scaling company is that your absence can greatly impact those around you. This can cause a perceived social pressure not to take time off because it may appear you are abusing the policy.
Do you think most unlimited vacation policies are offered in good faith or as a way to save money, since you don’t have to pay when an employee quits or by added working days when an employee doesn’t take vacation?
Hill: I think they’re always implemented in good faith. Employees being away from work does not necessarily mean the company is losing money. This seems way more of a company culture issue than a financial one.
Liu: I believe that most unlimited vacation policies are offered in good faith. The savings from not paying out vacation days is inconsequential in the long run.
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