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The pros and cons of unlimited vacation

Following in the footsteps of some of its Silicon Valley neighbours, social-media marketing provider Buffer Inc. eliminated employee vacation caps in 2014, but quickly discovered that the policy was having the opposite of its intended effect.

"We thought it sounded cool, so we kind of adopted that more or less without looking at it through a critical lens," said Leo Widrich, the company's chief executive officer and co-founder. "The following two years, we found that people on the whole were taking very little vacation time."

Only nine of Buffer's 25 employees travelled in 2014, and Mr. Widrich grew concerned that it was having a negative impact on the company. In hindsight, he attributes the policy's failure in part to the military-like camaraderie of the startup world, where taking time off can feel like leaving your fellow soldiers behind on the battlefield. Furthermore, Mr. Widrich suggests that his employees may have felt uncomfortable taking time when he and his co-founder hadn't taken a single day off themselves since founding the company three years before.

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It became so uncommon to travel that, in 2015, Buffer began offering bonuses to staff just for going on vacation: $1,000 for themselves and another $500 for each of their travel companions. Since then, 33 of the company's 35 employees have claimed their bonuses.

While the concept of "paid-paid vacation" may seem foreign in Canada, some U.S. firms – such as Evernote and FullContact – began paying staff to unwind after concluding that "unlimited vacation" unintentionally equated to "no vacation."

As Canadian employers begin to implement their own unlimited-vacation policies, however, they have the advantage of learning from the pitfalls experienced south of the border. Many are now introducing such policies with suggested or mandatory minimum requirements, allowing staff to take time to unwind without any of the guilt.

"We've had a chance to see their mistakes," said Fraser Stark, the vice-president of talent for Influitive Corp., a Toronto-based marketing software provider with 150 employees. "One of the mistakes is leaving ambiguity around what is reasonable behaviour, and we've solved that in a number of ways: One is demonstrating at the senior leadership level what appropriate behaviour is; another is having tongue-in-cheek 'minimum' levels of vacation."

While some might view an unlimited vacation policy as a competitive recruiting tactic, Mr. Stark says that Influitive had a different goal in mind. He explains that the company's decision to eliminate caps on vacation time is representative of its corporate culture.

"We don't measure what time people get in or leave at the start or end of the day, it's not a punch-clock culture, and likewise, we don't measure how many days per year people work," he said. "It can be a great test to see who is dedicated to the company. If you put this approach to vacation in place and someone books an eight-week Caribbean vacation, you've learned something about how much they care about the company and achieving results."

Furthermore, by encouraging employees to take at least two weeks of vacation each year, Mr. Stark says it also forces the company to learn how to operate without them. "Any employee could get poached away or run into a medical problem, so you're better off using your vacation policy as a way to test [coping with an employee's absence] before it happens," he said.

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Kurtis McBride, the chief executive officer and co-founder of Kitchener-based Miovision Technologies Inc. – which provides traffic-management technology solutions for municipal governments – believes that the days of formal vacation allowances may be coming to an end. While the company has informally upheld an unlimited-vacation policy since its launch more than 10 years ago, it was only made official last month, and incorporated a mandatory minimum.

"I'd like to think there's a revolution under way right now, where employers are starting to treat their employees like people, trusting them to come in and give it their all and do their best work," he said. "Employers across the country are starting to trust their employees and not design their systems for the 1 per cent that might abuse the policy but the 99 per cent that are coming in with the best of intentions."

Jeff Booth, the CEO and co-founder of Vancouver-based BuildDirect.com Technologies Inc., agrees that unlimited vacation is just one symptom of a larger revolution taking shape in workplaces across Canada. "When you design systems to prevent abuse for the worst people, you're actually hurting the best people," he said, adding that his company's unlimited-vacation policy, which went into effect at the beginning of the year, included a mandatory minimum as well. "When you trust people, they tend to trust you right back."

While many of the workplace trends that originate in Silicon Valley eventually make their way north, the trend of paid-paid vacation may not become necessary, thanks to the guidelines Canadian employers are putting in place.

"If it was baked in from the start, I think we would have saved some time and money," Mr. Widrich said, speculating on how things might have played out had he implemented a mandatory minimum along with Buffer's original unlimited vacation policy. "People probably wouldn't need the financial incentive to go on vacation."

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