Is an Unlimited Vacation Policy a Good Idea or a Recipe for Disaster?

Unlike large corporate companies, startups give you the ability to create a flexible work environment for yourself and your employees. But how do you know when to draw the line, so that no one abuses the perks?

In order to find out, we asked a panel of entrepreneurs from the Young Entrepreneur Council (YEC) the following question:

“Is having an unlimited vacation policy a good idea? Why or why not?”

Here’s what YEC community members had to say:

1. Yes

“There are situations where it doesn’t make sense. However, with my tech companies, it absolutely does. First, the policy eliminates having to track vacation days. Second, it empowers your employees. Third, it eliminates the need to cram in remaining “use it or lose it” vacation days toward the end of the year. “ ~ John Jackovin, Bawte

2. No

“With unlimited vacation, it’s pretty easy for no one to take a vacation. We implemented a minimum vacation of two weeks a year. We’ve had improved success when people have to take vacations.” ~ Wade Foster, Zapier

3. No

“Often at multi-national organizations, people tout their accrued vacation like a badge of honor. Each year it becomes apparent that those who dared to not use vacation won. At my company, our policy is to simply not have one. Placing accountability for performance and time management on each individual empowers them to have a more balanced life because each person needs breaks at different times.” ~ Grant Gordon, Solomon Consulting Group

4. Yes

“Yes. Work should be measured by the results, not the time that someone is in the office. If a company cannot trust its employees with something as basic as not abusing vacation time then their hiring practices are broken.” ~ Panos Panay, Sonicbids

5. Yes

“We tell employees to take three weeks off every year. We don’t have the time or resources to track vacation. If folks take a little more than three weeks, so be it. If they take a little less, there’s no accrual. The point is that we recruit highly motivated and responsible people who buy into our mission, and the policy has yet to be abused. “ ~ Brian Glaister, Cadence Biomedical

6. Yes

“We offer unlimited vacation to those who have been with us for two years. By this point, we know they are intrinsically motivated to help grow our business. They know their individual goals, and we trust them to use vacation judiciously. “ ~ Neal Taparia, Imagine Easy Solutions

7. Yes

“Absolutely. We have an unlimited vacation policy, and it lets our team know that we respect them, their time and their family lives. We have been smart about hiring intrinsically motivated people who will not abuse the policy, and it’s led to more trust, autonomy and respect across our organization. “ ~ Kelsey Meyer, Contributor Weekly

8. Sometimes

“There are plenty of companies with unlimited vacation days, and the employees don’t actually wind up taking any vacation time â€" that’s a problem. Burnt out employees aren’t going to be as productive. Before you decide on a policy, make sure you know what culture you’re prepared to create in your company. Policies should be secondary.” ~ Thursday Bram, Hyper Modern Consulting

9. No

“The word “unlimited” opens up the policy to be abused. The old saying goes, ‘If you give people an inch, they’ll take a mile.’ You need structure around this policy in order for it to be enforced properly and ensure your team members are being productive. Organization exists for a reason in business. “ ~ Russ Oja, Seattle Windows and Construction, LLC

10. No

“I don’t think “unlimited” is the right word, but we don’t have an official policy. We are an early-stage startup with 16 employees. Every person is key, and there is total transparency in who’s getting their work done and who isn’t. We don’t micromanage. We expect everyone to self-manage and fit in vacations when they need to decompress.” ~ Danny Boice, Speek

11. Sometimes

“Our company has under 40 employees, and it is easy for us to give this great perk to employees while still making sure people are held accountable for their work. However, consider the size of your company before you offer an unlimited vacation policy. It may be difficult to manage this policy if your company is upward of 100 people. “ ~ Matt Ehrlichman, Porch

Vacation Concept Photo via Shutterstock