Challenges (and Solutions) to Unlimited Vacation Policy

Breaking Down Challenges & Solutions of Unlimited Vacation Policies

Unlimited vacation policies, or “no vacation policy”, can be a real head-scratcher for the uninitiated. How is that even possible!? Well, of course it is possible and fearless leaders are doing it.

Still, if you and your employees are used to a fairly traditional work environment, the prospect of letting go of paid time off can cause some serious freak-out moments.

In this post, I want break down many of the challenges that come up from team members when you introduce something like an unlimited vacation policy or Results-Only Work Environment, and the solutions.

Challenge: You are taking away my benefit.

Vacation time, paid time off, sick time, personal days — all of these things are so ingrained in our work culture. People feel very protective over their “days”. They save them up, hoard them, fret over using them, and generally spend a lot of time thinking about them. This mentality is hard to break and it won’t change overnight. Employees value PTO because they feel chained to the office for the better part of the week. Their time is dictated by their boss. “Be here during these hours, and if you’re sick or have a medical appointment or need a mental health day, you gotta run it by me first!” PTO is a small piece of power and control in the lives of individual employees.

Solution: Unlimited vacation is a better benefit, if you do it right.

The system of tracking time and “allowing” and paying for people to take time off work is a broken system. Fixing that system is an invaluable benefit that goes above and beyond anything that PTO could provide. It gives employees the power, control, and autonomy they deserve as competent adults. An unlimited vacation policy will empower your employees. It just takes time to change the corporate culture so that employees feel the true benefit of owning their time. ALL of their time.

Challenge: You’ll make me work harder

Another concern I hear is that without set vacation times, employees will be expected to take on more work. You’ll expect me to answer the phone at midnight! How will I know when to “unplug”? You’ll just pile on more work and I won’t have vacation time to say “no, I’m on vacation now.. I can’t do it today.”

Solution: Employees and managers agree on measurable results.

Maybe you see a trend here. There’s a  lot of fear of the unknown when it comes to these changes. Throwing out the time-clock means that managers and employees have to get crystal clear on the work — expectations, results, and how to measure successIf an employee feels buried in work and stressed-out constantly, there’s a problem regardless of vacation policies. The conversation should never be an order handed down from management, but rather a conversation about what the outcome looks like and how the team thinks they should get there. Individuals decide when, how, and where they need to be to get results.

Challenge: No one will ever take a vacation!

You know this is a problem everywhere, especially in the United States, surveys say. There are a few reasons people don’t take vacation. 1. They’re buried in work (and for lots of reasons.. lack of efficiency, incompetence, or not enough support/staff) 2.They enjoy work. 3. They’re a workaholic. 4. They don’t have vacation time. 5. They feel guilty for taking time off, or afraid they will be seen as a “slacker”

The last one is a big one and I call the root of that problem “Sludge.” Sludge is the judgement cast on our co-workers for not following the rules of the office–you shall be on time, in your seat, and looking busy, and that makes you a “good worker.”

Solution: People will take the time they need when the focus is the work

Take away all of the Sludge that goes with the trappings of outdated traditional work environments, and people will find they are more productive, suddenly work faster and harder to get results and then enjoy the time they now have complete control over. It’s miraculous, really, and we’ve seen it happen over and over again. Just imagine all the time people save when they’re not worried about the commute, the sick kid, the judgey co-worker, the water cooler gossip, filling out timesheets, and jumping hoops to prove their worth. The work and their results are all that matter

Challenge: Everyone will abuse it and take too much vacation!

This is the opposite problem that generally pops up from managers and employees who are afraid of the “slackers” among them. Same thing goes for this challenge. It’s a sludge problem.

Solution: If employees don’t get results, they don’t have a job. Simple.

Take away the measuring stick of time + presence = results and you suddenly find yourself with a startling question: What is the work I need to do to get results? If you get your work done quickly, good for you! Your reward is more time. If you are slow, inefficient, and bad at your job, you either figure out a way to improve–quick!–or you are cut from the team. That should make people jump for joy! What a simple and elegant reward system. What a logical employee motivation program.

Throwing out policies and rules surrounding the time clock can be scary for some managers and employees, period. It takes trust and it takes culture change and it isn’t always easy. But man, oh man, the results are mind-blowing!

Challenges (and Solutions) to Unlimited Vacation Policy

What’s your opinion on unlimited vacation policy?

Posted in

Jody Thompson

Jody Thompson, along with her partner Cali Ressler, is the Founder of CultureRx and co-creator of the Results-Only Work Environment (ROWE). Jody is a nationally recognized keynote speaker and bestselling author. She has been featured on the covers of BusinessWeek, Workforce Management Magazine, HR Magazine, Hybrid Mom Magazine, HR Executive Magazine, and the New York Times. You can find her on Linkedin.

Reader Interactions


  1. Sabra says

    I have definitely been hearing a lot of rumblings recently about this new way of offering vacation time. It seems that almost all of the employer who do this have maybe 90% exempt employees. Have you heard of any employers or have any thoughts on employers who are on the othe end of the spectrum with maybe 20% exempt employee population?

  2. Jody Thompson says

    Great question. Unfortunately, non-exempt employees are shackled to the time clock and are often forced to use PTO banks to ‘fill’ a full-time week using time from these banks – including vacation time. The first thing an organization can do (after setting clear, and measurable goals) is put non-exempt employees on auto-pay – where they get paid for 40 hours per week, or ‘full-time’ (even if the work was done in 32 or 28 or whatever). They still track their time according to the law, but the DOL doesn’t say that you can’t pay a non-exempt employee for full-time work if they put in less time. What happens is non-exempt employees get more efficient, do more work and are more focused and effective when they’re not ‘filling their days’ in order to get full-time pay. They f eel more like exempt employees. At one of our clients for example, overtime costs dropped 50% when non-exempt employees were put on an auto-pay system. Work was getting done and people utilized their time better. Now, take the leap . . . as long as measurable and agreed upon results are achieved and all employees are held accountable to measurable results, couldn’t non-exempt employees work under the same system as exempt, as long as they logged their time-worked for DOL purposes? What’s important according t the law is that non-exempt employees receive overtime pay for hours worked over 40, or 80 in two weeks. I can’t stress this enough: what’s critically important is that all employees are held accountable to clear and measurable results, exempt or non-exempt. And in our experience, this is the piece that is more often than not, missing.



Pin It on Pinterest