Why We’re Opting for a Minimum Vacation Policy

When it comes to vacation policy, we’ve seen what works, and we’ve seen what doesn’t work. From big companies and established corporations to small companies and startups, you name it— we’ve lived through it: the good, the bad, and the ugly in each. So when it came time to think about ours, we sought to design the most liberal, progressive policy imaginable, one that actually encourages employees to, well, go on vacation for once (go figure!).

Now that we’re growing as a team, we wanted to define some guidelines, inspired by our Team Manifesto, that distill the best of what we’ve experienced into a policy that truly encourages employees to unplug and recharge whenever necessary.

These were the key elements we were looking to achieve:

  • A clear and open way to track vacation time.
  • An official annual holiday calendar that makes sense for everyone.
  • A 30-day paid sabbatical every 2 years.
  • A fair approach to extended leaves for medical, family, etc.
  • A commitment to do the right thing whenever employees leave, for whatever reason that may be.
  • We want employees to take vacations!

Why Unlimited Vacations Don’t Work

After a bit of reminiscing and research, we’ve opted for a minimum vacation policy. It’s become en vogue now for startups to market unlimited vacation policies as an attempt to lure in prospective talent. Unfortunately, these policies don’t really work, and as a result, that “work hard, play hard” motto simply devalues into mere lip service.

Research shows that employees end up taking fewer days off under unlimited vacation policies, even though they, in theory, are allowed to take off as many days as they want. There is simply too much ambiguity, which leaves room for peer pressure and judgment. We’ve actually seen startups promote unlimited vacation days, and then take issue when employees try to use them!

The data is clear. Taking time off to recharge makes for happier and more productive teams. In our 24/7 connected world, it’s even more important to provide people with the space and time to unplug.

Introducing A Minimum Vacation Policy

In 2017, we have 26 days lined up for vacation. Company holidays, which align with major U.S. holidays, as well as the week between Christmas and New Years, account for 14 of these days. We provide 2 floater days, to be taken on any occasion, such as a birthday or an anniversary. The remaining 10 days account for minimum vacation days. To reinforce our beliefs, and to encourage our people to get away, we’re offering a stipend for each one-week-or-longer vacation.

Each year, we’ll put together the company holiday calendar based on where holidays fall, and determine the minimum number of vacation days and stipend amount. Keeping track of time isn’t an act of policing or enforcing— rather, it helps us encourage each other to unplug.

What About Accruals?

Our policy does not include accruals. From our previous experiences, we discovered that people tend to horde their accruals, up to the maximum allowed, as a form of insurance for when they leave the company or get laid off. In this context, accruals deter people from taking vacations, since they’ll only use their days once they stop accruing.

We get it! It’s nice to have a safety net that can be cashed out, just in case. To address this, we’re implementing a 1-week minimum guaranteed bonus for all employees upon departure, no matter the cause, after 1 year of employment. For each subsequent year of employment, we’ll add another week of guaranteed bonus. We’ll probably have to put a max on this at some point, but for now, it’s uncapped. This is an area where you’ll want to get advice from your accountants to make sure this is properly tracked on the books.

And Extended Leaves?

We’re still working on a policy in accordance with the Family Medical Leave Act (FMLA). The federal laws around extended leaves are complex, but we’re collaborating with our trusted advisors on a fair, legal, and clear arrangement. To that end, we want to implement a policy that encourages people of all gender, ethnicity, age, and disability to feel supported. It’s clearly not a coincidence that we see unlimited time-off policies at tech companies peopled with mostly young men. It means that only a small minority of employees run into the need for extended family or medical leave. We are strong proponents of diverse workplaces, so we’ll need to answer this question in a way that is inclusive of everyone.

What Else?

Lastly, we’re in the business of commerce, and a good amount of our customer’s business takes place on and around major holidays. Our intention is to be available to our customers on a 24/7 basis! They rely on us, and we don’t want to let them down during their busiest times. We believe that this is achievable, even with our progressive vacation policy. Customer satisfaction and employee satisfaction are not mutually exclusive affairs! It all goes back to planning, preparation, and trust.

Header photo by Ryan Morgan, via Los Adventures.

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