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Unlimited vacation is the only thing that makes sense for startups

By Marcelo Calbucci

The business world today is dominated by rules and practices that were mostly created over the last 200 years during the industrial revolution. Almost everything -- from professional management to employer-employee relations – has been created to address the needs of a workforce producing services and products on a schedule basis. More products produced or more clients served, more revenue for the company. Because of it, working hours and time off work are critical pieces to make this system work. The difference between 2 weeks paid vacation and 6 weeks paid vacation might be the difference between a sustainable business and insolvency.

(Photo credit: Simone Zucchelli {ZUCCSIM})
However, for most technology companies that makes absolutely no sense. How many full-time employees’ developers, designers, testers or program managers clock their work? How many employees are evaluated by how many hours of work they did? When was the last time you got called to your manager’s office and were reprimanded for being 5 minutes late? Sounds ridiculous, doesn't it? Yet, that's what limited vacation policies are about.

When a company asks you to come be a developer there and change the world, but you have to take no more than X weeks of vacation a year, you are on the clock my friend. The company doesn't trust you to be a better judge of how many days you can take off, so they have to limit time off to prevent abuse.

Now, that's another ridiculous situation. The vast majority of tech workers that I know usually can't take all the vacation they are given. They work hard because that's what everyone does. They stay longer and take less vacation because that's the standard. So, what's up with a vacation policy that's so backward?
We originally didn't have a vacation policy at EveryMove. Actually, we did have one, somewhere, in some Word document that no one paid attention to. Once a candidate we made an offer to brought it up, I half-jokingly said "we don't have a policy yet, but how about unlimited vacation?" He laughed. I laughed. I brought that up to Russell, our CEO, who also was intrigued by the idea. The three of us, me, Russell and the candidate, spent some time investigating the gotchas, legal, accounting, HR, performance, and other issues around that and in a week or so we went for it. We adopted an unlimited vacation policy. We don't want to make a big deal out of it, because we don't see it as a benefit. We see it the same way we don't claim "no clocked hours" as a benefit. 

By no means are we breaking new ground here. There are many companies who have such policy, the most famous being Netflix. In Seattle, a few startups, big and small offer it including Estately, Buddy and just a few weeks ago Whitepages announced their unlimited vacation policy.

The first question that might come to any founder or CEO mind is how to prevent abuse of the policy, and the answer is exactly the same as how to prevent abuse of people who are working "too few" hours per day: Result-driven accountability -- if they are producing what you expect a top employee to produce, it's all good; if they are not, they should be told so and if necessary have their employment terminated. 

Individuals are unique and what makes one person productive might not be the same for others. Some people like a steady 40-hour week, some like to bust 60-hour weeks for 10-weeks and then take 2-weeks off. We believe treating employees as adults who are personally responsible to manage their work and its results is the way to go.   

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Posted on October 22, 2012 07:00 PM