With the goal of attracting and retaining top talent, companies are becoming more and more creative in developing employees benefits and compensation packages. There’s a lot of talk lately about unlimited vacation policies – we’ve all probably heard of Netflix, Groupon or Gsoft offering unlimited vacation time to their employees. But what is unlimited vacation and how does it actually work?
Under this type of policy, employees no longer have a bank of vacation days, but can take as much or as little time as they would like, generally after getting their bosses approval (just like you would for any vacation).
The cynics will say that companies choosing to do this have ulterior motives as some data shows that employees actually take less vacation as a result of this policy. That said, a lot of companies are doing this to show greater flexibility and to ease the cost of administering and tracking vacation banks.
The underlying philosophy is when you have dedicated employees who don’t count the hours they spend contributing to the company’s success and vision, why count the hours when they’re not at work? If people are committed and getting their job done, which manager wants to turn down a request for an extra day off to enjoy the long weekend, or even an extra week off to clear their head and come back rested and productive? Today, in most companies, people pay for people’s minds and not their bodies, so if they’re away and feeling creative, they may come back to work with the company’s next big idea. So why not?
Applying an open vacation policy in Quebec
While the concept may seem appealing to companies wanting to reduce bureaucracy, one caveat is that vacation is regulated in Quebec, and most employers are required to ensure that their employees take a minimum number of vacation days per year, in addition to owing them vacation pay when employment ends. So the thought of no longer having to do any administration around vacation is more dream than reality. Nevertheless, the time spent on administration could be reduced significantly, and the fact that employees have to take a minimum number of vacation days offsets the risk of employees taking no time at all.
We would also only see this policy working with employees who are paid on an annual basis. After all, as vacation hours are technically work hours in Quebec, which employer would want to pay overtime for someone to get all of their work done before leaving for their 6th week of vacation?
Company culture is key
The main barrier is not having a company culture that can support this. If employees are already overworked, stretched to the limit, and could barely take vacation to begin with, implementing an open vacation policy will give your employees a good chuckle. Also, if performance is measured (formally or informally) by attendance or “putting in time,” no one will see any benefit to taking additional time off. The employees who take advantage of this policy will be seen as underperformers and slackers who are not really committed.
The tone is set by upper management: if the executives work non-stop, never take a vacation day, and sign vacation requests with a sigh and an eye roll, the underlying message will be “we’re doing this just to seem cool, but we really want you here at work”. Hence why these policies can result in employees actually taking less vacation.
Personally, while some of our clients are considering moving to an unlimited vacation policy, we have not yet seen one in action; however, some big players, closer to us, have already been using it for years. While we find the concept very interesting, it is not for everyone. That said, for companies who have a culture built on flexibility and trust, this type of policy could align perfectly and be a nice complement to other policies in place, such as telework and flexible work hours.
Looking to modernize your people practices and policies, or just looking to review your retention strategies? Do not hesitate to get in touch with one of our People & Culture Advisors to see what practices could work best for you.
No budget for this? Subsidies are available with Emploi-Quebec for small and medium-sized businesses, which could cover up to 50% of the cost of your project.