The recruiter finally got the big question from the hard-to-land job prospect.
“What’s your vacation policy? I’ve got four weeks a year where I’m at now. I don’t want to go back to two.”
“Unlimited vacation,” the recruiter answered, smiling. “Take all the time you need to refresh and reset. We treat everyone here as adults.”
Fantasy, right?
No. That’s the policy at a small but growing number of companies across the country, from startups to expanding businesses to giant corporations.
British business tycoon Richard Branson threw his support behind the concept in September, stirring a rush of commentary weighing the pros and cons, in terms of both morale and practicality. Is it possible to let salaried workers take off whenever they want and trust they won’t abuse the freedom and cause your company to suffer in their absence?
Advocates’ logic, in brief: People are adults and work hard to complete their tasks. We don’t keep track of how much time they spend working at home or during off hours, so we shouldn’t keep track of how much time they spend not working, as long as the job gets done.
It’s a strategy that seems most fitting for employees who bury themselves in projects, then need time off to recover, rather than employees with steady streams of work whose absences would have to be coordinated with others’ schedules.
And not all companies that offer “discretionary time off” provide unrestricted vacation time. Las Vegas-based International Game Technology’s version, for instance, lumps sick days, vacation time and floating holidays into one pool, much like other companies’ “paid time off.”
As defined by Branson and others, discretionary time off — which seems to have been born at Netflix — eliminates the award of specific amounts of vacation time to salaried employees, doing away with the standard couple of hours a week or few weeks a year workers earn. In turn, that means there’s no pay-out of unused vacation time. Instead, the employee takes off whatever time he needs, after giving his supervisor a head’s-up.
Other versions of discretionary time off require assurances that work won’t suffer in the employee’s absence. Getting that approval from a supervisor can be a sticky wicket and source of tension between an employee and boss. Workers also may fear being judged for taking off too much time.
MGM Resorts International quietly introduced an open-ended vacation policy to its 3,000-plus managers a year ago, long before Branson weighed in. MGM calls it “flex time.” Hourly employees are not included, given the challenges of coordinating the schedules of 57,000 workers in the hospitality business.
MGM’s highest executives already had carte blanche vacation time, but expanding that perk to managers and supervisors was a “huge culture step” because employees tend to get rattled when management changes vacation policies, said Michelle DiTondo, MGM’s senior vice president of human resources.
“There were lots of questions and apprehension,” DiTondo said. “What if someone takes off too much time? Or not enough? How do you handle holidays, which for us are our busiest days?”
Twelve months later, “it has been very well received,” DiTondo said. “There have been very few issues of people abusing the policy. Most take off what they need, but they’re not taking off time excessively. Some managers worried there’d be days when nobody would come to work, but that hasn’t been the case.”
It appears the amount of vacation time taken in 2014 is about the same as previous years, despite the open-ended policy, DiTondo said.
The new policy also has saved MGM back-office headaches. As MGM acquired other companies with different vacation policies, human resources and payroll offices were flummoxed trying to keep it all straight. Now, all managers fall under one vacation policy — or lack of one.
DiTondo said she took off four weeks in 2014.
How does MGM justify unlimited vacation time?
“The majority of our managers, due to the nature of our industry, work long days and holidays. They need to take time off to maintain their productivity,” DiTondo said.
And if someone abuses the policy?
“We tell our managers to run their businesses and if someone takes so much time off that they’re not performing their jobs, then address it with them,” she said.
The policy helps in recruiting, too. Before discretionary time off, vacation time was negotiated with new hires to close deals. Now, it’s a simple answer: Take what you want.
It’s hard for some people to wrap their arms around the concept, DiTondo acknowledged.
“People don’t deal well with ambiguity,” she said. “People like a chart that says that after three years of service, they’ve earned 80 hours of time off. Ambiguity generates anxiety, and yes, this is an entirely ambiguous policy. So we did a lot of training and explaining. And we’re confident this policy won’t turn high performers into low performers.”
Still, there is plenty of wariness. Chicago-based Tribune Publishing heard a howl of opposition when it offered discretionary time off to supervisors at its group of newspapers, including the Los Angeles Times. Editors and reporters were uncomfortable with asking for, and approving, liberal time off, and both groups shared anxieties that, in an industry facing chronic downsizing, people who sought long vacations would be noticed, perhaps deemed slackers, and might ultimately pay the price. Times employees fretted they’d take even less vacation than they had been allowed, leaving the company’s bottom line the only winner. The CEO, acknowledging the protest, dropped the idea.
Venessa Wong, associate editor for Bloomberg Businessweek, agrees the policy could result in employees taking less, not more, vacation.
“The glow of trust and togetherness that such policies provide could actually make employees less likely to take time off,” Wong wrote in a September column. “Already, some 40 percent of American workers don’t use all their paid vacation days. Even away from the office, employees can still choose to be on their BlackBerrys for 168 hours a week (as the device’s marketing materials point out, to every worker’s distress). Abolishing official vacation days also means you can’t trade unused days for cash, or hoard them for 20 years and take a hard-won paid sabbatical before retiring.”
Zappos, the online retail company of 1,600 employees that’s famous for an unconventional workplace environment distinguished by boisterous frivolity and festively decorated cubicles, considered adopting discretionary time off but chose not to because of mixed feedback from workers.
“A lot of people like having actual allotted vacation time so you don’t have to guess what’s OK to take,” Zappos HR executive Hollie Delaney said. “Others liked the flexibility and knowing that they had freedom to take time off as long as their work got done.
“If we were going to adopt DTO, it would have included the requirement that everybody take at least one consecutive week off during the year,” she continued. “Some people just love to work all the time, and we thought that they need at least one full week to refresh and reset.”