Unlimited Paid-Time Off? Seriously? How to Make It Work. We know what you're thinking: Employees would abuse such a system. But it can work with three critical factors.
By Ken Grouf
Opinions expressed by Entrepreneur contributors are their own.
If you give someone an inch, will they always take a mile? Many employers might be surprised to hear about a business that would provide unlimited paid-time off to full-time employees. However, this policy can be successful if a company's culture is founded on trust and mutual respect.
The first step toward creating a culture that can withstand a trust-based policy is for leaders to look outside of the workplace. Leaders must recognize that employees are not only workers, but also parents, spouses, sons and daughters who may have an obligation or emergency to tend to on occasion. When employees are given flexibility, in most cases, it is proven that they respond by being more loyal to and passionate about the company. According to Expedia's 2013 Vacation Deprivation Study, American employees on average use only 10 out of every 14 vacation days each year.
Related: You Need a Real Vacation (And So Do Your Employees)
As the president of Kriser's, I was not always convinced that this policy was the right fit, especially in a retail setting. But as the business continued to expand from nine stores to 24, I found that it was necessary to build strong company values that could be translated across all of Kriser's markets.
In my experience over the last few years, providing unlimited paid-time off to full-time employees -- managers and assistant managers in our stores and headquarters management team members -- has fostered a much stronger sense of mutual trust and respect between all individuals of the company. Each store must work with its own team, along with other local teams, to support each other when in need, which has brought the company closer as a whole.
We have seen that unlimited vacation has enormous potential and benefits. However, just like any new policy, organizations should implement it carefully and make sure they look at any potential risks that might impact their particular company. To set a solid foundation for granting employees this flexibility, I recommend companies consider these three factors before employing an unlimited policy:
1. Cultivate trust. Trust is absolutely imperative. While the term unlimited could insinuate a free-for-all, when deploying autonomous policies that empower your staff, there has to be a level of trust involved. Ways to foster trust include promoting open communication, creating transparency between managers and staff and listening to your employees. All of these efforts will help to earn employee respect, and in turn, trust.
Related: Which Countries Get the Most Paid Time Off? (Infographic)
2. Set goals. At Kriser's, we hold our employees accountable by setting goals. If there is a direct correlation between an employee's vacation time and not meeting sales goals, he or she will be held accountable. Creating an unmatched customer experience through education, engagement and a passionate staff is the key to our success. If the staff is unable to uphold the company's customer-service goals due to missed work, we make an effort to communicate with them transparently to resolve the issue.
3. Plan ahead. While this system could potentially lead to employees taking excessive time off, the employees at Kriser's on average request less than two weeks of vacation each year. We have found that many staff members appreciate the option and don't want to abuse a program that benefits their work-life balance. If a company has limited staff, it can be challenging when multiple individuals leave for a vacation. At Kriser's, the staff work to support each other, so occasionally employees are temporarily transferred or given shifts at store locations in close proximity to cover team members who are out. However, this is why guidelines are inherent when requesting time off, to ensure everyone has fair notice.
One percent of companies offer unlimited paid-time off, according to the Society for Human Resource Management, but the number is predicted to grow. Some big-name companies following this growing trend are Netflix, Best Buy and Evernote.
Keeping full-time employees engaged and passionate is the key to running a successful business. These individuals are the direct link to the consumers and the quality of service the company delivers. As a leader, it is wise to implement programs that empower employees and build mutual trust and respect.
