When the unlimited vacation policy doesn’t work

Many of us startups provide what we call unlimited or flexible vacation policies, with the goal being to take as much time off as you need, as long as it’s manager approved and you can get your work done. There are so many pros and cons and I’ve seen so many people ask why to have or not to have an unlimited vacation policy in place. 

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Most people think that unlimited means people will take off all the time. And, yes, we have seen that happen on some very rare occasions. We do have a policy, for example, that interns no longer get vacation during their stint at Tinfoil. Internships are typically 3 months and have a set project. If an intern takes off too much time, they’re less likely to finish the project in the scoped out time. That doesn’t mean if all of their friends are going to Yosemite they can’t, but we don’t advertise vacation for them. 

What we’ve actually found for the flexible vacation policy, though, is that usually we see the opposite of most founders’ concerns: employees don’t take nearly enough time off to avoid burnout. There are lots of different things we’ve implemented in order to make our flexible  vacation policy work. The first thing we implemented was holidays. We try to have one holiday a month. Sometimes those are just fun, silly holidays like Pi Day, and other times they’re your standard federal holidays, like Thanksgiving. On occasion, they’re things we’re going to do together, like Tinfoil’s Anniversary. We try to make sure holidays are spread evenly throughout the year and allow time in conjunction with both weekend and weekdays throughout the year to break up the normal routine.

When we implemented holidays, the policy was that you could still come in to work, but shouldn’t expect anybody else to be in the office. Initially, many employees still worked holidays, but it eventually got to the point where we realized that we should really take those holidays off. We started to and we noticed a drastic drop in stress and burnout levels.

Once we implemented the holidays, we still had a couple of issues where some people were still going to the normal rhythm. They wouldn’t take longer vacation and, though the holidays helped a lot, they didn’t fix the entire problem. Part of what we noticed was that if someone did something outside of their normal routine on a weekend, for example, if they traveled or did something unique that they didn’t normally do, they typically got to the point of burnout way less frequently. This led to a solution: we took a handful of holidays (typically holidays such as Pi Day, that employees weren’t already traveling for or doing atypical events for) and called them special holidays. We’ve been beta testing special holidays for 2-3 years and they work wonderfully. 

For a special holiday, we give you up to $60 to go out and do something outside of your typical routine. This could mean going camping, kayaking, skydiving, getting a fondue as a group… anything you wouldn’t normally do. Of course, we have had to create guidelines over time. We reimburse up to $60. If it’s under $60, that’s ok, but we ask our employees to be honest and we’ll reimburse up to the amount they actually spent. There are some things that we’ve rejected, as well. As always, you have to be flexible and revisit your policy over time. For us, we saw some employees doing the same thing every special holiday. We eventually made the rule of there needing to be at least a 12-month gap between repeating the same event or activity. 

We did have to implement a few guidelines at the beginning, based off of questions employees asked. For example, if you want to host a party, that’s OK, but if you want to play a bunch of board games, you can’t buy six different games on the company and call it good. We wanted this to be for experiences, and not for physical items. We encourage employees to use it in a manner in which they can actually experience something that they wouldn’t usually do. We found that, when people actively partake in this benefit, they tend to come back refreshed and get excited about what they did, whereas those that didn’t do anything new don’t have the same level of “refresh.” People excitedly talk about the things they did and others end up wanting to do that experience the next time, so we have a page on our internal wiki to add fun weekend ideas to share with others. This is great for team bonding, great to make sure that people don’t hit burnout, and it’s one of the few things we’ve added to make sure our unlimited vacation policy works. 

It’s true that every so often you’ll see somebody taking advantage of any policy you have in place that’s beneficial to them, but, on average, we believe our employees are honest, faithful, and act with integrity. Often, you’re going to see that unlimited vacation expectations are set by the top. If your management is not taking enough of a break, your employees won’t take enough of a break, and everybody will suffer. There are lots of little things you can do to make this policy successful. What have you found? Have thoughts on how we could improve our policies or new ideas we can try? Email me anytime with suggestions!


Ainsley Braun

Ainsley Braun is the co-founder and CEO of Tinfoil Security. She's consistently looking for interesting, innovative ways to improve the way security is currently implemented. She spends a lot of her time thinking about the usability and pain points of security, and loves talking with Tinfoil's users. She also loves rowing, flying kites, and paragliding.