Why We’re Ditching Unlimited Vacation. And What We’re Doing Instead
In 2013, we launched an unlimited vacation policy at Gaslight, and I’ll admit I wasn’t too excited about the idea at first. While I think most traditional paid time off (PTO) policies are terrible, I wasn’t completely sold on the idea of saying, “Hey, take all the time off you want.” It’s not what we really told people, but that’s how it felt to me at the time.
Two years later a number of high profile companies, including Virgin, have jumped on the unlimited vacation bandwagon to media fanfare. We didn’t launch our PTO policy for attention, but it did help us land on this list of companies with the best workplace perks in Cincinnati. It was a nice mention, but our real goal was to create a PTO policy that worked for both people and the company. By not tracking vacation days, we hoped to accomplish three things:
- Give team members the means to truly recharge. Research shows the more people work, the less productive they become.
- Build trust with team members and increase flexibility.
- Align with the culture and values we want at Gaslight.
The biggest fears around unlimited PTO revolve around two questions. First, why wouldn’t someone take advantage of unlimited vacation? And second, how do you deal with it if one person decides to take off a month or more? We stuck with our unlimited vacation policy for roughly two years, and these fears were totally unfounded. In fact, the only real problem took me by surprise: People didn’t take enough time off.
I didn’t see that challenge coming, but apparently, we didn’t stumble across anything new. In one article I found, Lotte Bailyn, a professor emeritus at the MIT Sloan School of Management, said, “When vacation time is offered as an unlimited resource, many people decided not to take advantage because it’s too hard to figure out the right amount to take.”
It turns out that in our strong, trusting culture most people ended up erroring on the side of too little vacation instead of too much. Once I dug into the data, I discovered the amount of time off varied greatly across the company:
- Average number of days off per team member in 2014: 12.75
- Highest number of days off: 24
- Lowest number of days off: 4
It was clear to me that we needed to do better. After talking with team members, I discovered that some people felt guilty about taking time off. They didn’t want to let their project teams or clients down. I wanted to improve the paid time off policy without losing too much flexibility or negatively affecting our company culture. The main goal: Give most people more time off, so they could truly recharge.
As I thought about a new policy, I wanted to retain the spirit of unlimited vacation without leaving people to guess about the acceptable amount of time off. I also wanted to make it easier to plan for time off on the business side of things–both for revenue projections and trying to normalize around specific utilization and realization targets that are healthy and sustainable. Eventually, I landed on a solution that I hope meets these needs.
The answer? A PTO policy that focuses on minimum time off. We now expect every team member to take a minimum of two weeks off each year, and we give each person the flexibility to take a maximum of four weeks off. Sick time is not included in this policy. If you’re sick, you’re sick. Those days don’t count against you. PTO is in addition to paid holidays, including Gaslight Retreat week and an entire week around Christmas.
My hope is most team members will actually enjoy more time off than they did when we offered unlimited vacation. We’ve already found it easier for planning. We’ve ditched the ambiguity around our old policy and empowered people to recharge without feeling uneasy. Now the only struggle should be making sure you squeeze in at least two weeks of rest and relaxation.