Does Unlimited Vacation Make You More Productive?

Ah, unlimited vacation. The stuff of dreams! This perk has recently become a popular siren song for in-demand workers in the tech and startup worlds. It’s become so common that in a study conducted by Indeed, job postings with “unlimited vacation days” actually increased 178% from 2014 to 2019. Companies like Dropbox, Hubspot and Hive (yes, us!) have implemented unlimited PTO as part of their employee benefits package. Dropbox’s reasoning? “Work-life balance is an important aspect of wellness. That’s why we provide generous time off policies for everything life throws your way. Whether it’s a new baby (new parent leave), a family vacation (paid time off), or a nasty cold (trust sick leave policy), we’ve got you covered.”

With all these companies jumping on the unlimited vacation bandwagon, there are clear benefits to offering a limitless vacation pool. First off, it’s a way to market your company and attract new employees — the promise of trips to the beach without limit is obviously appealing, and a way to differentiate yourself from other companies. It’s also a way to prioritize mental health, something that is, thankfully, becoming more top-of-mind for employers in recent years. When you need to take a day off for health or personal reasons, you don’t have to worry about it chipping away at your 15 days of vacation, you can just take the time off and relax. Allowing your employees to have full control over their schedule is also liberating and empowering for them, which will in turn improve their overall performance and dedication to the organization.

On a similar note, limiting burnout is another major benefit of unlimited vacation days. “Burnout” was actually defined by the World Health Organization earlier this year as “a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed,” and has three main characteristics including “feelings of energy depletion or exhaustion; increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and reduced professional efficacy.” There are many ways to improve or overcome burnout, which include meditation, exercise, and time spent away from your work. Having access to unlimited vacation days can provide the space and time needed to recover fully from burnout.

Despite the many, many benefits of unlimited vacation days, which include happier and potentially healthier employees, there are a few negatives. One of the main negatives is that employees will never get paid out for unused vacation days. In a traditional PTO set-up, you’ll be paid for the days you don’t use when you leave your current gig. That doesn’t apply with unlimited vacation days, and could actually end up saving your employer money in the long run if you short change yourself.

But who would actually take less vacation days? Interestingly, a study conducted by Namely found that people who have unlimited vacation days actually only take 13 days off, instead of the standard 15. This could be for many reasons, but is most likely because they don’t want to abuse their unlimited plan, and are approaching their vacation time cautiously.

Another negative of unlimited vacation is employee guilt. Without the strict guidance of a set number of days off, employees can actually feel guilty when they go on a vacation. This is partially due to the work culture we’ve fostered in the United States, where long hours are a badge of honor and spending less time at your desk can be viewed as “weak.” In a great article by The Cut, they dive into the psychology behind unlimited vacation days, and note that “in order for unlimited-vacation policies to be taken seriously by employees, companies have to foster a culture that makes taking time off feel not only possible, but welcomed.” This means that leadership has to actually take vacation, encourage breaks, and create an environment where people feel comfortable and supported when they take time off.

If the existence of unlimited vacation days isn’t enough to get you to set up an OOO, there are statistics that might help assuage your guilt. In research conducted by HR company Namely, they found that high performers too an average of five more vacation days than the rest of their colleagues. That statistic is the ultimate case for taking time to unplug, unwind and disconnect from work. Decreasing employee burnout with time off is also a surefire way to increase productivity and happiness in an employee, which in turn helps creativity and improves employee retention.

Overall, we’re still pretty far away from unlimited vacation days being considered the norm in the United States. But companies in the tech and startup space are helping to pioneer a new PTO policy and reshape the way we think about vacation and time off from work. Looking forward, it seems like we will continue to see an increase in companies including unlimited vacation days in their list of benefits, and we’re excited to see how this transforms the workplace and work/life balance.

Does your employer offer unlimited vacation days? What do you think about these policies?