Everybody Wins with an Unlimited Vacation Policy

February 25th, 2020

The first thing you hear when you tell someone that your company is moving to unlimited vacation time is, “Great; I’ll be taking the next 11 months off!” But when you explain that you’re a software company, you hear, “Oh, I see so, you’re one of those companies that dangles the benefit, but in reality, no one can ever use it because you’re too busy with the tasks.”

No. The answer is no to 11 months off, and no, we don’t use the policy as a ploy. In fact, we REQUIRE that all employees take a minimum of two weeks off per year paid. Full stop. We are a tech company, and when your product is software, your assets are people. So, creating a strong company culture becomes exponentially more important than the algorithms or lines of code you create. Think, “Culture eats strategy for breakfast.” – Peter Drucker. So why and how did we do it?

First, we took a look at our bus (a metaphor for our company) and determined who needed to sit where and who was missing. The empty seats, we determined, would likely be filled by Millennials or Gen Z workers, and we knew that they wanted different things out of work than their Baby Boomer counterparts. We learned some of this through surveys and interviews we conducted several months ago when we developed an employee handbook and company policies. The result of that research lead us to adopt flexible schedules, remote work, paid volunteer time, and 11 paid holidays, among other things.

Recently a dilemma presented itself when negotiating with a candidate who asked for more vacation than we offered our first-year employees. The request was for a minimum of four weeks of vacation, and we were offering two. While we had a provision that allowed for the possibility of negotiating more time off in an employment agreement, it somehow didn’t feel right that two employees with roughly the same experience and credentials could have a difference of three weeks or more in vacation time.

Enter the progressive forward-thinking, CEO. I had done a lot of research on unlimited time off when we looked at employee benefits last year. I found that companies that offered it weren’t less productive but more! Often employees take the same amount or less time off than employees with limited time. It was also seen as a great way to impact your work culture, and because there is no accrual of time, there are no tracking headaches and final pay calculations are a breeze. Kay enthusiastically welcomed the idea, so the only thing left to do was craft the policy, and we felt the entire team should do it together.

We chose to look at the policy through the eyes of a project manager. In other words, the more notice given, the easier it would be to plan the tasks of meeting our technical milestones. Keeping that in mind, we developed a rubric based on the amount of notice given, number of people gone at once, and the duration of the vacation. At Introspective Systems, if you’re the first person to request time for a certain period and give three months’ notice, you will get the time off. Generally, we ask that employees only take a two-week duration vacation one time per year but will allow exceptions with team approval (think honeymoons or trips to faraway places). We believe that taking a non-hierarchal approach, where the team is the decision-maker, will lead to better group accountability and employee empowerment.

By now, you must be wondering what constitutes an abuse of the policy? How much is too much time off? The answer to both is performance. We want to hire employees who are reflective of our core values. We want to work with dependable people who take ownership and are both innovative and courageous. It seems to us that if employees are underperforming or not a good fit for our company, it won’t be because they took too much time off. We’ve all worked with people who show up regularly but aren’t particularly productive and rock stars who kill it on a regular basis but might work odd hours. I said the answer to both questions is performance, so if you’ve been here a while, always give it your all but feel you need to go hang out with the Dalai Lama for a while to refocus and clear your head, yeah we’re probably going to approve that.