Want Employee Innovation and Accountability? Try Unlimited Vacation

Couple on a deck chair relaxing on the beachThis month, news stories and blog posts have been popping up everywhere on the latest business trend – unlimited vacation. From Seattle to London, people are buzzing about this increasingly popular policy that, according to an NPR article by Jennifer Ludden, 1% of U.S. businesses have adopted.

While that might not sound like much, it means that one out of every 100 businesses in America have removed the “Accrued Paid Time Off” line from their paycheck stubs and now focus on their employees’ results, not their hours worked. And, it’s a trend that’s steadily growing.

In Ludden’s story, she highlights a small business in Seattle who’s owners recently announced to their employees that from now on there would be “[u]nlimited paid leave, no strings attached.” As I’m sure you’ve surmised, the employees were pleasantly surprised.

Now, you might be saying to yourself that they were able to do that because they’re a small business with more flexibility. But, just two days after this article was released, Telegraph.co.uk published a story about Netflix’s similar policy.

Netflix is a $7 billion company with around 600 salaried employees, so there’s nothing small about it. As reported by Daniel Pink for Telegraph.co.uk, the thought process that led to its executives’ deciding to allow unlimited time off was if Netflix wasn’t tracking how many hours people were logging every day, such as after-hour e-mails and weekend brainstorming, why were they tracking how many holidays they were taking?

Pink’s conclusion was that “freedom and responsibility, long considered incompatible, actually go together.” And, if you really think about, it’s true! After all, aren’t those the two traits that drive and inspire entrepreneurs to take risks, follow their passion, and succeed within their own businesses?

Now, both companies still expect accountability from their workers. Everyone has to get their work done and meet their deadlines. Managers need to know when employees will be off and how they can be reached. But, the employees aren’t complaining.

Employees are able to stay home when they’re sick. New dads can take six weeks off to be with their wives and new babies. Families are taking extended vacations together.

And, it’s been good from the business’ standpoint as well. Employees are more engaged and productive, which equals higher profitability and innovation for employers. It’s been especially valuable recently as many companies are still gun-shy of reversing pay cuts and hyper-focused on productivity and innovation.

Think about this. What would your business look like if every employee treated your company like it was their own? How much would you save in healthcare benefits if employees actually stayed home when they are sick? What would it be like to be the top employer that everyone wanted to work for?

Now, admittedly, this arrangement isn’t for every company. It won’t really work for hourly employees or certain service-orientated businesses. But, it is an interesting trend to keep an eye one.

We’d like to know if your business is in this 1%? If so, how is it working for you?

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One Response to Want Employee Innovation and Accountability? Try Unlimited Vacation

  1. Lindsey August 25, 2010 at 3:27 pm #

    I saw that article about Netflix – sounds like a great idea if you’ve hired right and have employees will respect the privilege. I think most people wouldn’t abuse it, and that it could provide an incentive to work harder before and after the vacation. I also think a lot of people would stay home when they’re sick, which is a good thing.

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