Offering unlimited perks – such as vacation time – could actually backfire

Professional services firm EY found that employee productivity levels increased by eight per cent if businesses offered ten extra hours of holiday time. This concept has mostly been capitalised on by companies in the technology sector.

Netflix has been an early adopter of the vacation non-policy, along with firms such as Zynga, Groupon, Evernote, VMware, Eventbrite, and HubSpot.

However, several studies have suggested that “unlimited” perks would be of no benefit to the company. For example, a 2014 report from Oxford Economics found that companies were saddled with $224bn (£144.40bn) in liabilities for vacation days that employees were given but did not use. 

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Jessa Kilgore, the founding board member of HR Solutions, said that because employees worked on vacation, they no longer felt they needed to limit vacation time.

Take, for example, what happened at Evernote. The company offered unlimited vacation to its employees in 2011, but it started to notice that members of staff were actually taking less time off. According to Bloomberg, this was because employees were hoping to look better in front of their bosses. 

“Indeed, the first thing we noticed when we did it was that some people started taking less vacation,” said Evernote CEO Phil Libin. As an added incentive, Evernote began writing $1,000 (£644.64) checks for anyone taking a trip. However, employees needed to produce evidence of an airline ticket and had to report back to colleagues on what they did while away. 

“Our employees are better after they have traveled,” said Libin. “They are more productive; they are more useful to the company.”

Bruce Elliott, manager of compensation and benefits for the Society for Human Resource Management, suggested that such policies had little impact on staff behaviour.

“Employees won’t take any more or less than they would normally take,” he said. Elliott added that taking too much vacation simply “looks bad”.

Management consultant Marc Dorio claimed that the reason for this may be something called “work martyr syndrome”. Competitive workplaces simply keep employees from using the time off they have earned.

In part, it’s because “busyness” is something we wear as a badge of honour. But it’s also because we’re emerging from a tough economy and many feel less secure in their jobs.

By Shané Schutte

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