The End of Time-Off As We Know It: Unlimited Vacation or Zero Vacation?


Billionaire Sir Richard Branson has done away with vacation policies at Virgin.  I think that’s a wonderful idea.  I’ve always believed that if people don’t get paid to think about work when they’re home in the shower, or answer texts before breakfast, or write emails late at night, their employer should be a bit less uptight about when they decide to call a day “personal time”.

The line between work and the-rest-of-your-life is blurry, and getting blurrier all the time.  Even jobs that are traditional punch clock work bleed over into non-work hours.  Cell phones, texting, voicemail—technology has made every job 24/7 in some way.  It’s increasingly difficult to enforce a policy that rigidly controls when a worker is “on vacation”.  Managing paid vacation days also requires an enormous logistical data trail:  requesting, tracking, approving, accounting, and policing time-off is a job only penny-pinchers, bean-counters, and bridge trolls enjoy.

Why not simply undo it all and tell employees they can take what they need?  Back in the 1990’s, I ran an Internet Service Provider, and we sort-of did this.  Our sick policy was very simple:  if you’re sick, stay home.  If you’re well, come to work.  Enjoy your job.  That was it.  We did track vacation, but (in my degraded memory) not very closely.  People took time off when they needed it.  We had one person take a few months off.  She simply stopped coming in, and we couldn’t reach her.   One day she returned to work like nothing happened.  There’s a difference between taking time off when you need it and abandoning your job—we fired her on the spot.

Branson makes a big deal about NetFlix’s “non-policy” on vacation.  NetFlix doesn’t really have an unlimited vacation policy any more than my ISP had one.  Daniel Jacobson, Director of Engineering for the NetFlix API, writes:

At the core, Netflix does not have an “unlimited vacation” policy, we have a trust policy. If we trust you, then we will trust you and will give you great liberty to accomplish amazing things. If not, we will part ways.

Trust is more than a concept at NetFlix:  it’s the core of the company’s culture.  If you are not trusted, you don’t work at NetFlix.  I would presume that Virgin has a similar culture*.  Without trust, vacation non-policy is easily abused.  If NetFlix were forced to keep employees regardless of trust, would they be able to have this policy?  I think not.

The best company to work for, vacation-wise, has to be Denver-based tech startup FullContact.  Founder Bart Lorang realized that even when he took time off, he never really took a vacation, so he decided to pay each employee $7,500 to take vacation.  They don’t have an all-you-can-eat plan like NetFlix and Virgin (they give 3 weeks), but they do ensure you enjoy your vacation, and really disconnect.  Their rules:

  1. You have to go on vacation, or you don’t get the money.
  2. You must disconnect.
  3. You can’t work while on vacation.

Honestly, that’s hard for me.  I’m not sure I could qualify for the prize.  Like most entrepreneurs and business leaders, I find it extremely difficult to completely disconnect.  I feel like I’ll return to a smoking crater if I do.  Lately I’ve taken to ocean cruises when I want to completely disconnect.  At sea, you can stay connected only at a very high price, so I cost justify going offline, but still have the possibility of connecting in an emergency (and it’s only for a few days).  Even heading to the mountains or remote areas these days isn’t enough to be completely off-grid, unless you go to Antarctica or the Alaskan wilderness.  I’ve seen pictures from remote Amazon areas where dirt-poor villagers are nose-down in their smartphones.  The level of discipline required to get $7,500 may simply be beyond my ability (it would be one heck of a vacation though).

FullContact’s approach raises another question:  is a vacation non-policy really worth anything if you are “always on”?  If you can take whatever time off you want, but you’re never really disconnected, one could argue that you get zero vacation.  You just have a lot of flexibility about where and when you work.  If the corporate culture is centered around you completing your work, and the work pile is always growing, there’s a fair amount of guilt associated with really getting away—a real vacation.  If your company doesn’t keep track of time off, when you leave (or are let go), you get zero accrued vacation pay.  I don’t know if NetFlix (or Virgin) have a line item on their balance sheet for accrued vacation (it’s a liability), but making that go away certainly increases the value of a company.

Could a vacation non-policy simply be a shareholder-centered money grab masquerading as an open-minded employee-enabling stance?  It very well could.

Perhaps the best answer is some blend.  If your corporate culture favors hyper-A personalities and a very tight trust circle, like NetFlix, your employees probably would rather work all the time anyway.  Most of the Silicon Valley crowd puts on a good show of acting laid back, but at heart, they are all Kool-Aid-drinking fanatical workaholics.  They devise ways to work harder, longer, and more intensely, and even compete for the honor of living at work.  This has its downside: if the hyper-A’s believe they’ve been played—if their tech creds and compensation don’t keep up—they bolt.  It’s the reason once a high-tech startup springs a leak in its talent pool, it implodes quickly.  If the A-listers don’t think you can make it, they will jump for the next opportunity, leaving you and your investors holding a very expensive (and empty) bag.

At odds with this is the entitlement-and-control crowd who oppose a company’s freedom to only hire rabid ADHD poster-children with Ph.D.’s and skinny jeans.  These people want structured, mandated, and enforced leave policies, work rules, and sit-at-your-desk-even-with-nothing-to-do insanity.  I’ve seen some of this infection at government installations, where working too hard can get you slapped with more peer complaints than breaking every security protocol or just slacking off completely.  There’s an unbridgeable gap between these two poles.  You can’t maintain a fast-moving, workaholic culture with lugubrious slackers and system-abusers.

Among economically developed countries, the Europeans require employers to offer, on average, between 25 and 30 days of paid leave, including a raft of paid national holidays and “bank holidays”.  The U.S. has ten Federal holidays and a smattering of state holidays, which are usually optional, and no paid leave requirement.  In Europe, it’s likely that NetFlix’s policy would be challenged.  Since Virgin is a British company, I’m not sure how they will get past government sentinels.  The worst innovation killer is governments that require paid leave, and have a very strict procedure for firing employees.  Like Italy, where “[it’s] easier for me to get rid of my wife than to fire an employee.”  It’s no wonder that NetFlix doesn’t have an office in Italy—not to mention that NetFlix’s service isn’t even fully available there.

What’s the answer?  I don’t know.  Do what’s the best fit for your company, and if the government doesn’t permit it, move.  Really.  It’s easier to change addresses, policies and procedures than to rebuild a corporate culture.  I can’t tell you if Virgin’s new vacation non-policy will work out for them, but to Branson, it certainly was worth trying.

*I am also assuming that the “anytime you want, time off” vacation non-policy doesn’t apply to Virgin Atlantic pilots and crew members.  Virgin Atlantic pilots are represented by the British PPU—an “e-union” specifically set up for Virgin’s pilots.


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