HR & Management

CEO gives employees $7,500 a year if they promise to get off the grid and enjoy the sun

3 min read

09 July 2015

Bart Lorang, cofounder and CEO of Denver-based tech company FullContact, aims to keep his employees happy and refreshed through a "paid paid vacation" scheme.

By actively nudging his employees out of the door by using cash, Lorang hopes to render staff members completely inaccessible. 

In addition to the standard 15 days paid vacation plus federal holidays, the company gives employees $7,500. That’s $7,500 on top of their full salaries to finance a vacation. Lorang, who calls it “paid paid vacation”, has naturally set out some ground rules.

“One, you actually have to take a vacation to get the money,” Lorang said. So that means no staying at home and pocketing the cash. The second condition maintains that employees cannot work at all during their vacation – including not checking work emails or texts and not making or taking work phone calls.

Even Lorang admitted he has trouble following his rules. He said: “I suck at it.”

According to the CEO, the policy has made a big difference in the company’s culture and has been good for business.

The really big names in tech all focus on the same idea, that employee happiness and creativity has to come before everything else,” he said. “While it’s really difficult to measure that return on investment from a financial standpoint, it’s not difficult to measure what happens when someone returns from a paid paid vacation: you see, without fail, people shining brighter, working harder and more excited to get back into the swing of things.”

Read more about CEOs who have used innovative means to keep employees happy:

What people still don’t understand, Lorang has suggested, is the way the vacation policy has improved the day-to-day structure of the company.

It’s what he calls “an amazing forcing function to eliminate single points of failure”. By having employees take vacations where they’re completely off the grid, he’s built a culture that can’t depend too heavily on one person for any particular thing. 

Everyone wants to feel indispensable, and startup cultures are particularly prone to “hero syndrome”, he suggested. Employees would start exhuming an “I’m the only one who can do this” mentality.

“But here’s the thing,” Lorang said. “If people know they will be disconnecting and going off the grid for an extended period of time, they might actually keep that in mind as they help build the company.” That means empowering colleagues, documenting their code more clearly, and generally sharing knowledge.

Tech companies have become known for their extravagant perks, with Google offering on-site health care and paying for college degrees, while Facebook gives new parents $4,000 of “baby cash”.