Bryan Ochalla is a freelance writer and editor based in Seattle.
At least one association has found success with an unlimited-vacation policy, but that doesn't mean yours will. Before you follow in its footsteps, read what that organization's CEO, as well as two other experts, have to say about the pros and cons of unlimited vacation and paid time off.
Based on all of the attention in the media lately, you might think unlimited vacation or paid time off (PTO) policies are all the rage at American businesses.
In reality, less than 2 percent of U.S. companies and organizations currently offer either of those perks, according to the Society for Human Resource Management (SHRM).
What's keeping the remaining 98 percent from joining the fray? One possibility, suggests Bruce Elliott, SHRM's manager of compensation and benefits, is that the idea of unlimited vacations is still too new for the men and women running those workplaces.
Another is that a good bit of groundwork needs to be done before organizations put plans like these in place. A couple of cases in point, according to Elliott: "There has to be engagement between management and the employees. And there has to be a fair bit of trust, too, on both sides."
The reason you're doing it is so they actually take time off. Bruce Elliott, manager of compensation and benefits, Society for Human Resource Management
Allen Lichter, MD, echoes Elliott's perspectives when asked what associations have to do if they want to remove the shackles, so to speak, from their PTO or vacation policies.
He should know. The association he's led since 2006, the American Society of Clinical Oncology (ASCO), stopped tracking vacation and PTO time as part of a larger initiative five years ago.
When he joined ASCO as CEO, "the environment here was fairly rigid," Lichter says. "Office hours were set, telework was not widely allowed, it was even difficult to be employed here part-time."
In other words, it operated like most associations do.
Over the next few years, Lichter worked to modernize ASCO and move it away from what he calls its "highly traditional" origins. "We offered more flexible hours, more telework availability and more ability to work to part-time if it was necessary," he says.
For a lot of workplaces, that would be the end of it. Not at ASCO. "We wanted to continue to push the envelope," Lichter says.
The main result of all of that envelope-pushing: The organization transitioned to what's often called a results-only work environment (ROWE).
Asked to explain, Lichter says ROWE is akin to telling staff members, "You are fully functional adults, and you are capable of running your lives, so let's focus on what you accomplish, not how much time you spend at your desk."
ROWE companies and organizations differ from their more traditional counterparts in a number of ways, one of them being that they stop dictating how much PTO or vacation time people can take. "We let them make their own decisions about where they work and when they take time off," Lichter says.
Although Lichter describes his association's experience with unlimited PTO and vacation time—as well as the rest of what comes along with ROWE—as "highly positive," he says achieving that result wasn't easy.
Here are a few pieces of advice he and Elliott have for any associations hoping to follow in ASCO's footsteps:
Carefully consider the makeup of your staff before moving too far ahead. If you have long-service employees and their average age suggests the bulk of them are baby boomers, you might want to think twice about offering this type of benefit, says Elliott. "If you have younger employees, though, and your organization is relatively small, this could work well for you."
Your millennial staffers "will get this right away, or at least they'll be more open to it," he says. Their older counterparts, however, "are used to the traditional vacation paradigm. 'You get X number of days off tied to X years of service.' They're more likely to respond to this with, 'Great, I can take as many vacation days as I want. So, how many days can I take again?'" Another possible response is that your more senior employees will be miffed that you're leveling the vacation playing field.
That's not to say you should turn up your nose at unlimited PTO or vacation if your employee base skews older. In that case, Elliott says, "You may want to say that people have to take at least five or 10 days off each year. That will provide the predictability some of them need."
Keep in mind this probably isn't going to be a once-and-done kind of project. Lichter says he scheduled a number of follow-up meetings with staff members in the weeks and months after ASCO got rid of its PTO and vacation caps. "That's where we discussed and worked through all of the questions and problems that surfaced after we flipped the switch," he says.
An example of a problem that could pop up, according to Elliott: "Your employees may ask you, 'Wait, I have this vacation accrual that I've built up over a number of years, and now you're going to take it all away?'" It's important you answer that question in a way that allays their fears, he says. "Especially since that isn't the reason you're moving to unlimited PTO or vacation. The reason you're doing it is so they actually take time off."
Speaking of which, Lichter says he and the association's senior staff members "have had to push hard to get people to understand they need to take time off and they need to unplug from the work environment. Because one of the more surprising things I learned as this unfolded was that when vacation becomes 'unlimited,' people take much less of it."
A recent Harris Interactive poll supports Lichter's findings. Specifically, it found that US employees use just 51 percent their eligible paid vacation time or PTO each year.
Know that new employees may enter your association a bit confused. "When we started this process five or so years ago, everyone in the organization was trained. Everyone participated in seminars and discussions that helped them wrap their heads around the changes we were planning to make," Lichter says.
Anyone added to the association's ranks after making the change won't have had the same opportunities, of course, and that could cause a few problems. "It's challenging to come into a work environment that is completely upside down compared to any other environment you've worked in before," he says.
To address this potential sticking point, Lichter says ASCO offers refresher seminars from time to time "so we can bring everybody back up to speed."
Don't go into this situation thinking you can just toss it out there and expect it to work. Like Elliott suggested, Lichter says you have to do some prep work before you implement or even introduce an unlimited PTO or vacation plan to your staffers. "This isn't something where you fire off an email one day that says, 'Starting tomorrow morning, here are the new rules. Have a nice evening!'" Rather, he says, "it has to be planned and carried out with meticulous attention."
Before you make a beeline for your association's employee policy manual—if you're anything like Lichter and his cohorts, you'll end up cutting about 90 percent of it after you implement an unlimited vacation or PTO plan—you'll want to consider Sherry Marts' words of warning first.
For starters, Marts, owner of S*Marts Consulting, LLC, suggests it's a bad idea to offer your staff unlimited PTO or vacation time and then stop there, calling it a half-hearted approach.
The problem with focusing only on unlimited vacation or PTO, she says, is "when you do that, people don't take the time off or the vacation. Why? Because we have developed a work culture that says the number of hours someone spends in the workplace is an indication of how hard they're working or how much they're getting done."
As a result, if you put the proverbial axe to your PTO or vacation plan "and don't also work to change your culture and address the notion that work is equal to time spent in the office, you're not going to see much of a benefit from your effort."