We at engageSPARK have an unlimited vacation policy. It sounds good, right? Or … too good to be true? Unlimited vacation isn’t without controversy. Today we’re fixing one of the issues for us, and I’ll explain our thinking behind it.

Problems with unlimited vacation policies

So, what is the problem with unlimited vacations? Mostly, it’s about all the wrong reasons why the company is doing it.

#1 It’s a perk. And a scam.

The biggest complaint with unlimited vacation seems to be that some companies use it as a perk to attract employees. And then it turns out to be a scam.

Oh, you want to take vacation off? Like, in the next few months? For more than a day? Come on, have you seen the roadmap? Ever heard of deadlines? Dah. Just take it later when there is less stuff going on.

This is about squeezing employees. If they’d be given vacation days then—gasp—they might feel entitled to take those. So, offer them unlimited days and you ironically can pressure them to take less.

The more subtle version of the scam is a culture where taking a vacation is a weakness. You can take plenty of vacation. You just don’t.

#2 Avoid paying out vacation days

In some countries, if an employee leaves without having taken their vacation, the employer is required to pay out some or all of those days. An unlimited vacation policy then helps companies save money. If they don’t promise a specific number of vacation days contractually, they don’t need to pay them out.

I’ve no idea if companies introduced unlimited vacation actually with this as a goal, but it’s probably a happy side effect for some bean counters. This strategy of course doesn’t work the same way where you have minimum vacation days by law.

#3 Lazy managers

The third reason I’ve read about is: lazy managers. Apparently, tracking vacation days is a major headache for some companies, their HR departments or managers. So much so that the company shells out unlimited vacation to save that effort.

I concede it’s a nice side benefit of the policy, but I can’t imagine that this is the real reason. (Maybe that’s just me.)

So, with all those unhappy reasons for unlimited vacation, let’s return to the basics for a moment: Vacation—what are we trying to solve here?

The point of vacation (days)

For you and me vacation and remuneration have one thing in common: You need a bit of both to survive. Earn too little and you can’t buy food, can’t pay your rent. Work without a break and you run a good chance of burning out. At a minimum, vacation is about recharging.

From a business perspective vacation is simply about staying in business. That is true if like engageSPARK your business relies on the sane mind of its workers. It’s really hard to stay in business if they burn out or run away. We’re in for a marathon. Gotta keep running. So, you need some amount to recharge.

After that, vacation is about something else. Vacation is for that trip with the whole family to Spain. Or for that long hike that doesn’t fit into a 2-day weekend. For visiting the sulfur lakes in Ethiopia. Those are the long ones. But it’s also about being able to take care of 1-day things: For bringing the kids to the doc. For extending your driver’s license—which in some countries takes an entire day.

In short: Vacation is about living your life better. And by the way, this is also where remote work fits in: Juggling life’s different priorities is just that much easier when working remotely.

At the end of it everyone probably agrees: vacation is important. What’s wrong with the tried and true model of fixed vacation days?

Why we switched to unlimited vacation

Vacation is one of those things that becomes more tricky with an international and remote team. Here is our journey when it comes to vacation.

We started out in the Philippines, where vacation days and sick days are separate. I assume the idea is that employees are protected from spending vacation days early in the year that they may need later to call in sick. This may or may not make sense, but it did lead to situations where people pretended to be sick to have a longer vacation. Do we really want people to lie to enjoy a vacation? (We don’t.)

While we were trying to figure this out, we extended our team internationally and things got more tricky. You see, in the Philippines, you might get 5-10 days vacation and 5 sick days. In the US 10 to 20 days of vacation seems to be normal. In Germany, 20 days und up are. It doesn’t stop there.

To confuse things further, in the Philippines there is an abundance of special and regular holidays. The exact number is not obvious when the year starts, as some are declared only weeks ahead of time. In the US public holidays are few and far between. In Germany … it depends on the state. If you want to be fair and want people to feel treated fairly how do you do that?

Do you give everyone five sick days, even to the people who’ve never heard of the idea? Or 10? What if someone is sick for, gasp, six days? Should they immediately go unpaid in that system? What if you give 10, and someone never uses them?

And, how many vacation days? 10, 20? Based on time with the company? Or the same for everyone? While weighing options, we were reminding ourselves again of the point of unlimited vacation. It really isn’t about counting sick or any other days. Vacation is about recharging and living our lives.

Do you need a vacation? Well, take it. You need that Monday off to clear your head? Alright.

So, we removed the upper cap: no more limits.

But, but what if …

What if people take advantage?
What if they disappear for a 2-month pilgrimage, starting tomorrow?
What if they take off three days every week?
What if they join a polar expedition and aren’t heard from for half a year?

Yes. But it hasn’t happened yet.

So far we’re a team of responsible individuals and we have a common goal: move engageSPARK to success. If that’s your goal, you don’t disappear. You don’t decide to be off for two months tomorrow. When you want time off, we talk and figure it out.

Unlimited vacation works based on trust. And I think that’s fine because if you can’t trust someone, you’ve got a different problem on your hands. Trust can work well in a small team—I’ve no idea how far you can scale it, but definitely up to hundreds of people.

We also rely on each of us knowing ourselves a bit. We rely on you recognizing that you need a vacation and taking it. This brings us to the problem we’re fixing now (and why vacation days were invented in the first place).

The race for the lowest common denominator

We’re all responsible and mature, sure. But we’re also driven and want to build something great. And we still watch each other.

Is it really okay to take another vacation? I don’t think my colleague or boss took as much vacation as me.

This kind of thinking easily leads to a race to the bottom: no one takes a vacation because no one else is. It’s both absurd and very, very human.

So, how do we fix this kind of self-induced pressure? By going full circle, because as they say: history doesn’t repeat itself, but it rhymes.

The fix: raising the minimum (and enforcing it)

What was the point again? Recharge and live your life, right?

So, to make sure we recuperate, we add a rule:

You must take 2 weeks off a year.

That’s the bare minimum of continuous vacation that we demand. To make sure that it’s actually helping, we’re being picky:

Individual days and long weekends do not count at all. The two weeks must be taken as at least one full week at a time.

In short, the fix for moving from vacation days to unlimited vacation is: remove the upper cap but keep a lower cap. That’s very much in line with HubSpot’s two weeks of mandated vacations
and Buffers minimum recommendations of three weeks. Gitlab has another fun variation: no need to ask until 25 days. More is possible but then you need to ask.

What it doesn’t mean

Adding a minimum does not change anything about you being able to take more vacation.

In fact, you should take more time off when you need to recharge. Do you love doing a week a quarter? Go. You dream about a meditation retreat at the foothills of the Himalayas? No philosophical problem there either—let’s figure out how we can make it work. (And send pictures.)

Apart from that, you still can and should take days when you need them to fetch a visa, bring the dog to the vet or whatnot.

Policies are a piece of paper

So, that’s it? It’s written down—happy ever afters, here we come? Not quite. At least not from a manager’s perspective.

Policies are a statement. As we’ve seen at the beginning they’re also just words. Like corporate values, they’re ink on a paper unless they’re lived.

The obvious next step is to enforce the minimum. That means that we managers need to start keeping track of this. (Poor lazy me!)

But there is one better and a (almost) surefire way to build trust around a policy. And that is for leaders to lead by example. In this case, to take a vacation. (Are you good at following your own advice? I’m not. Here’s my challenge then.)

Putting the pieces together

That being said, this is how I think unlimited vacation can work for us:

We declare a minimum amount of continuous vacation. That’s at the moment two weeks.

We as a company track blocks of continuous vacation. As the year progresses, we check the minimums. If someone seems to forget about taking vacations, we start pushing. After the minimum is reached, we stop tracking. (Job done!)

We managers lead by example, taking those minimum vacations visibly.

We keep our eyes open for anyone who might need more vacation than they’re taking.

I’m quite sure we’ll fine-tune this further—and I’m curious to see how this will scale. Maybe we’ll need more detailed guidelines like Gitlab. But for the moment I hope adding a minimum helps us with the point: recharge and live our lives.