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What Vacation Policy Should I Offer My Employees?
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What Vacation Policy Should I Offer My Employees?

January 31, 2019
vacation policy

As the office manager, it can be easy to get caught up in the chaos of managing business operations. With several employees to manage and various moving parts to oversee, it may seem like the job description of the office manager is never ending—but that’s because it’s incomparably important. Along with everything else the office manager must do to keep the office afloat, this person also has the privilege of implementing an office-wide vacation policy that can alter company morale. Are you stuck wondering which vacation policy is the best to offer your employees? Let us help you out with our research.

The Problem With Vacation Policies

The fundamental problem with many vacation policies is that they ultimately require employees to work harder and stress more in order to make up for the time off, which negates the point of taking a holiday in the first place. Before employees get to use their vacation days, they usually have to jump through administrative hurdles—filling out old forms, getting signatures, forwarding documents—to even activate the vacation days they were allocated at the beginning of the year. By the time employees are ready to leave the office, they tend to be more stressed about the pile of work they will return to than excited about the forthcoming “vacation.”

Before you attempt to fix this by implementing an unlimited, open-ended vacation policy, consider the drawbacks. The principal problem that arises with this kind of policy is that employees start to make their decisions about vacation based on what they see other people in the office doing. In a blog post, Mathias Meyer, the CEO of a German tech company, wrote, “When people are uncertain about how many days it’s okay to take off, you’ll see curious things happen. People will hesitate to take a vacation as they don’t want to seem like that person who’s taking the most vacation days. It’s a race to the bottom instead of a race towards a well rested and happy team.” Are you starting to seriously consider that trip to the Egyptian pyramids you’ve always wanted to take? It’s going to be harder to convince yourself you deserve it when John in customer relations and Judy in HR haven’t used a single vacation day this year.

Solution 1: Implementing Scheduled, Mandatory Vacation

One possible solution to this problem—where neither strictly allocated company vacation days nor unlimited ones provide the incentive to take a vacation—is implementing recurring, scheduled mandatory vacation. In his TED Talk, Designer Stefan Sagmeister explained his reasoning for taking sabbaticals, or one year off every seven years. The way Sagmeister sees it, life is essentially divided into three parts: 25 years of learning, 40 years of working, and 15 for retirement. By taking a sabbatical once every seven years, he’s essentially cutting off five years of retirement and interspersing the remaining 10 throughout the working years, allowing his curious and exploratory side to exist alongside—and even feed—his professional career.

To put the scheduled mandatory vacation policy to the test, Neil Pasricha and Shashank Nigam collaborated and had the employees of Nigam’s aviation strategy firm take a mandatory week off once every seven weeks. The experiment was designed so that employees who contacted the office during their vacation were not paid, making the vacation actually mandatory in this case. Furthermore, employees’ weeks off were decided ahead of time for them so everyone else in the office knew when others would be absent, eliminating the guilt or stress involved with leaving. After 12 weeks of the scheduled mandatory vacation policy in place, managers noted that employee creativity went up 33 percent, happiness levels rose 25 percent, and productivity increased by 13 percent. It became evident that a week off not only gave employees a necessary break from working but allowed them to relax and recenter enough that they were actually better at their jobs when they returned.

Solution 2: Alternative Vacation Policies

If a less sweeping vacation policy is in order, there are plenty of creative ways modern-day offices have found to give employees more productive time away from the office. Hanapin Marketing, for example, is a Bloomington, Indiana-based company that has created a fake holiday called “2nd2nd” to give employees an innocent reason to skip work. Paid sabbaticals, like the ones Atlanta-based money lender Kabbage provides, gives employees a fully-paid six week break for every five years of employment in addition to a generous annual stipend.

Another way to inspire employees to take time off is to follow in the footsteps of Seattle-based software company Outreach, which incorporates two days of paid volunteer work into its employees’ salaries. The Santa Monica-based company VideoAmp provides annual vacation stipends of $2,000 for employees to go on vacation with their families. Glassman Wealth Services in Vienna, Virginia even pays for its employees’ honeymoons, so long as they’ve been an employee for at least two years. The San Diego-based Cloudbeds offers free housing to employees for up to two weeks at a time in San Diego and Sao Paolo, Brazil as an incentive to leave the office more. Many of these companies also offer unlimited paid time off in addition to their more creative ways to get employees out of the office, which is only an option for certain companies and has its disadvantages, as previously discussed. For some perspective, the Google vacation policy includes 15 days of paid time off for first-year engineers, 25 days for 3-year employees, and 25 days after five years, but not unlimited paid time off.

Picking the best vacation policy for your office marks a significant step in gaining the loyalty and respect of your employees. Although your budget will dictate which plan you pick in the end, remember that your employees will be happier, and therefore more productive, if they are encouraged to take time off. By allowing your employees to go on vacation, you’re communicating that you want to see their work go places.

Written by:

Junel Seet
Digital Marketing at Kisi