Why Unlimited Vacation Policies Don’t Work

Conrad Saam Conrad Saam | October 30, 2024

Well, enough time has passed that I’m happy to share the results of Mockingbird’s experiment with the ever favorite Unlimited Vacation Policy.  In short it sucked and I had to rescind it.  We’ve regressed (kind of) back to that corporate, earn your vacation over time and use it as you see fit within the constraints of the plan.  Here’s why:

The graph shows the amount of time taken off by my 21 employees during 2021. Obviously, there’s a huge disparity amongst employees as to what they think is appropriate for vacation time.  This lack of equity is one of the primary reasons I ditched the Unlimited Time Off.  But there’s more nuance to this:

  • I’ve highlighted in red those employees who were let go during ’21.  Now, they weren’t fired because of their use abuse of the policy, but for other performance issues.  But there’s clearly a very high correlation between poor performance and lots of vacation time.
  • One of the main criticisms about Unlimited Time Off is that the best employees actually take less time off.  This proved true for us as well… with some of my best peeps taking less than a week off.  Fully a third of the staff took less than 2 weeks off…. and subjectively, these were some of my best people.  That’s simply not enough time to get away from Google, Lawyers and coworkers.
  • The two people in blue on the far left – 90 and 77 days?  Those are new Dads – encouraged to take a full three months off for Paternity leave. When we ditched Unlimited PTO, we did codify a full three months of Paternity leave into our new policy.  (And yes, find me another small business that provides full PTO to Dads….)

And yes, I hear the theoretical defense of Unlimited PTO – “just hire better people”.  Well it’s not that easy – for the very reason that great people may all have very different perspectives of what a reasonable amount of time off is…. which inevitably leads to inequality.

Finally, I haven’t bothered to redraw this graph since making the change, simply b/c I know our HR System accounts for all of it.  This means there’s no ad hoc managerial conversations about why Bill seems to never be at work while Mary is burning the midnight oil.  Unlimited PTO means you are going to have those conversations and either consciously or subconsciously people just being at work is an element that seeps into the collective conscience of the agency.