Unlimited Vacation – Your Key to Workforce Engagement?

How does your company balance workforce engagement and job satisfaction with vacation policy?

Limitless Vacation Days

A ‘no-policy’ vacation policy is an emerging trend in companies across the U.S., writes Erin Osterhaus, managing editor at HR technology resource firm Software Advice, in “Do You Even Need a Vacation Policy?”

Emergenetics International summarizes Osterhaus’ article in “Employee Engagement and Vacation Time.” Rather than traditional vacation plans, some employers offer employees “the freedom to decide when and for how long to take time off.” Osterhaus calls this “an ‘unlimited’ paid time off (PTO) policy.”

We all know how important workforce engagement is to productivity and businesses’ bottom-lines — did you know that unlimited vacation can lead to engagement? According to Leslie Kwoh of the Wall Street Journal, it actually shows employees you trust them. In her article, “Go Ahead and Take Off, for as Long as You Like,” Kwoh writes,

“By showing that they trust their workers … employers say, they are cultivating a culture of even deeper trust.”

Yet only 1% of U.S. employers offer unlimited PTO, according to the Society for Human Resource Management’s (SHRM) 2012 Employee Benefits Survey. According to Osterhaus, this may change. Limitless vacation supporters  confirm “that by giving employees the liberty to choose their work schedule, morale, productivity and employee retention has improved.” Not only that, but the policy frees up HR admin costs and time!

Read on for examples of unlimited vacation time in action!

Workforce Engagement Examples

That’s a sign of improved workforce engagement. Kwoh’s article shares the perspective of several employers who offer this perk:

1.  Red Frog Events, a Chicago-based weekend entertainment organizer, hasn’t tracked employee vacation time since bringing its first hires on board about two years ago. Many of the company’s roughly 80 full-time workers “take a couple of days here and there” to recharge or fulfill personal obligations, like attending a friend’s wedding, but no one has abused the company’s unlimited-vacation-time policy, says human-resources director Stephanie Schroeder.
2.  Jay Jamrog, senior vice president of research at the Institute for Corporate Productivity, a research organization, says unlimited vacation time is a low-cost way to win loyalty from employees and can help compensate for things like low salaries, pay freezes or loss of bonuses. It sends the message that a company values work-life balance and employees’ well-being. “It’s perception more than anything else,” he says.
3.  Dov Seidman, chief executive officer of advisory-services firm LRN, acknowledges that since the company implemented unlimited vacation three years ago, some workers have “made the wrong decision” and missed meetings to take time off. Still, such mistakes are rare, he says, and “no one’s ever gone for four weeks.”

A High-trust Culture

Limitless PTO can lead to improved workforce engagement. If you’re considering it, though, remember that trust is key. Jay Jamrog is the senior vice president of research at the Institute for Corporate Productivity — in Kwoh’s article, he asserts that unlimited vacation is a low-cost way to win employee loyalty.

Not only that, but it compensates for things like low salaries, pay freezes or loss of bonuses. Unlimited vacation policies send the message that a company values work-life balance and employees’ well-being. “It’s perception more than anything else,” says Jamrog.

Still, such a policy isn’t a good fit for every company, he says, and employers should proceed with caution. “You have to have a high-trust culture,” he says.

Do you and your employees trust each other? If so, give this policy a try and boost your workforce engagement today!

For more great tips and insights into building a vibrant culture of workforce engagement and appreciation, be sure to download our free eBook, “The Ultimate Guide to Employee Gift-Giving”

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