Workers Walk Line in Employer's Unlimited Vacation Policies

Aug. 29, 2013 — -- This Labor Day weekend, Linda Devito is taking an extended vacation to the Caribbean, which isn't going to count against her vacation days. She's not traveling for a work trip and her trip extends past the observed federal holiday. But Devito's not counting: Her employer has an unlimited vacation policy, a policy that is trending beyond the bounds of tech companies.

Instead of a standard two-week vacation policy, Devito, 36, director of marketing partnerships for the XO Group, Inc., says employees at her media company communicate closely with one another and their managers to make sure the time off doesn't interrupt work.

"You just get what you have to get done. You're accountable to your team. You don't want to let your team down. You want to collaborate," she said.

Devito, who has worked for the company for six years, said the unlimited vacation policy makes sense for the XO Group. The company's business premise celebrates life stages in various forms. Based in New York City, the company owns the wedding magazine The Knot, WeddingChannel.com, first-time parenting website The Bump and newlywed resource The Nest.

The unlimited vacation system, which was implemented in January 2010, contributes to a culture of "accountability," she said. The company does not keep track of the average number of vacation days per worker.

But can workers take the culture of accountability too far and feel pressured not to take vacation days at all? Not in her office, Devito says.

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A recent survey at XO Group asked employees if they felt like they are taking advantage of the unlimited vacation policy. Most people answered affirmatively and shared anecdotal answers, explaining that they are spreading their vacation days throughout the year.

"When you have a set number of vacation days, people cram it in," she said. "They say, 'I have to take the rest of my days because they won't roll over next year.' They fight for the last couple of days of the year."

While vacation days are flexible, working remotely is not a strong part of XO Group's culture. However, a large portion of the company's local sales force works from home.

Doug Schade, a recruiter at WinterWyman in Waltham, Mass., estimates that about 10 percent of the tech companies he works with offer unlimited vacation, but he admits that's just an anecdotal estimate.

"Some of my co-workers thought that was high and others thought that was too low," he said.

Tech companies like Netflix boast that they have no vacation policy at all.

Netflix explains on its website that an employee pointed out, "We don't track hours worked per day or per week, so why are we tracking days of vacation per year?"

"We should focus on what people get done, not on how many days worked," Netflix explains. "Just as we don't have a 9 a.m. to 5 p.m. workday policy, we don't need a vacation policy. There is also no clothing policy at Netflix, but no one comes to work naked. Lesson: You don't need policies for everything."

Lotte Bailyn, professor of management, emeritus, at the MIT Sloan School of Management, is skeptical that these unlimited policies are beneficial to employees. She recently published a column in Quartz titled "Unlimited Vacation Time Is Better in Theory Than in Practice."

"Vacations are very important," Bailyn said. "But as indicated in the piece, making them unlimited works only if there are accepted standards for everyone, including the bosses."

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A better scheme than unlimited vacation days, she says, would be to mandate a few weeks of vacation and then allow up to a number of more weeks over that.

"Informal standards are probably hard to achieve," she explains.

Bailyn said companies in which the culture is "right" will benefit.

"Those who just copy a fad will not," she said.