Santa Clara University


Business Ethics in the News

Back to Blog

UNLIMITED VACATION: Best Practice or Cost Cutting Measure?

Thursday, Feb. 20, 2014
Source: Wikipedia
Source: Wikipedia

The average American receives 2 weeks of paid vacation, but a new trend among Silicon Valley tech firms goes against the norm by offering employees unlimited vacation time. Among the big names to implement the policy are Netflix, Best Buy, and Evernote, in addition to a number of startups. Employers adopt the policy with the hope of keeping productivity up in the long run, as well as a perk to recruit top talent. Employers also tout the policy as a way of “treating their employees like adults,” and building a culture of both freedom and responsibility. But there’s also a silver lining for employers — with unlimited vacation policies, days off are not accrued. This means that when a worker leaves the company, the employer no longer has to provide them with a lump sum for unused vacation time. Furthermore, at many fast paced firms, there is never a “good time” to take vacation, and without clear guidelines from employers, it may result in even less vacation time taken. Are unlimited vacation policies in the best interest of the employees or an underhanded cost cutting measure?

  Patrick: Unlimited vacation policies come down entirely to implementation. When coupled with a constant and extreme pressure to produce results, these policies put employees between a rock and a hard place — and at the end of the day, the company saves money at their expense. To be done right, unlimited vacation policies must be paired with a corporate culture that actually lives by responsibility and freedom, along with a clear message from management that employees are expected to take vacation time. Evernote addresses this by offering a $1,000 stipend, if and only if employees take a one-week vacation: those who don’t miss out entirely.

A special thanks to Frances Mann-Craik for suggesting the topic!

Some Companies Give Workers Unlimited Vacation (NBC)

A Framework for Thinking Ethically (Markkula Center)


NEXT STORY: Trucost Announces 2014 Natural Capital Leaders

Comments Comments

Brendan said on Mar 11, 2014
It is a best practice for folks that handle money and financial transactions to take at least a full week of vacation once a year as a measure to detect fraud - someone filling in has a chance to notice irregularities, or metrics that show a change when a specific person is out may point to a problem that has been undetected thus far. - Like - 1 person likes this.
Patrick said on Mar 11, 2014
Great point, never thought of that! - Like
Post a Comment