Employer Branding

Pros & Cons of Unlimited Vacation Time for Employees

Two weeks of paid vacation a year? How about unlimited vacation time? These days, the latter question isn’t as audacious as it sounds.

Companies around the world including Virgin Group, Netflix, Groupon, Glassdoor, HubSpot & many others offer their employees unlimited vacation time. If this vacation policy goes as expected, Virgin Group’s Richard Branson plans to recommend it to his company’s subsidiaries as well as companies all around the world.

While this policy has its supporters, others inquire how effective it will end up being in the long run. Each company will have to weigh the pros & cons of implementing this policy company-wide:


  • Avoid the year-end scramble: Many companies require their employees to take their vacation time within a twelve month period. If employees are trying to save their vacation time for unexpected events, they could end up having leftover days at the end of the year. This can lead to the employee regretting they didn’t take the vacation time during an earlier time of the year. In order for these employees to not feel like they “wasted” their vacation days, an unlimited vacation time policy can allow the employee to take time off when they feel like it so they can then feel truly satisfied with the days they took off.
  • Loyalty is encouraged: A happy employee is a loyal employee. Loyalty in turn lowers turnover rates. While unlimited vacation time is not the sole factor to employee loyalty, it can be a positive contribution towards it.
  • Hire the best: It is difficult to hire the best of the best when a limited vacation policy turns away applicants. Instead of picking an applicant based on who will accept an unflattering vacation package, a company will be in high demand if they have unlimited vacation time as a perk. With the influx of many applicants, the employer can now do extensive background checks to pick the best of the best.
  • Morale is improved: Employees can get very concerned about leaving work early for personal business or pleasure. Taking out the concern they will be disciplined on their return (or using up a valuable vacation day), an employee will not feel guilty about taking the time off – nor will they feel the need to make up an excuse for their absence (for example: “I had a doctor’s appointment.”)
  • Better team dynamic: In the past, an employee felt compelled to cover for their co-workers when they were absent. Implementing unlimited vacation can encourage co-workers to collaborate better since they know their fellow team member will cover for them when they need to take time off. It may not feel like an obligation for co-workers to cover for each other but more like a collective effort.


  • Choice overload: Just like a person can be overwhelmed by choosing which vacation destination to go to, they can just as easily be overloaded with choosing which vacation days to take. Too many choices can lead to no choice at all; a quandary that could frustrate and immobilize an employee.
  • Comparison gauging: If an employee does not know the “normal” amount of vacation time to take, they can feel guilty if they take more time off than their peers. If they avoid that guilt by taking even less time off than their peers, those peers in turn can take off even less time as well. Down the road, this can lead to dissatisfied employees with poor work ethics. Adding flame to the fire, these employees may be too afraid to speak up to their supervisor about this concern in fear of losing favor with him/her.
  • Reverse coercion: It can be argued employees will choose not to take much time off because they were offered unlimited vacation time. In any company, an employer keeps track of a worker’s performance & behavior. He/She gives the opportunity for workers to outperform their colleagues to get rewarded in return. If an employee reasons he/she will be rewarded for not taking time off, all the employees may constantly try to one-up each other until they convince themselves they will be rewarded for not taking any time off at all. If co-workers are trying to out-do each other on a very extreme scale, this can lead to a stressful environment that ultimately turns bitter workers away from the company.

What will be the determining factor of unlimited vacation time’s effectiveness? The answer is time. The companies that decide to test this new concept on their employees will have to see if there are any adverse (and unforeseen) consequences with its application during a specified time frame. If there are fewer negative issues than their current vacation policy, n the company may decide to permanently implement unlimited vacation time for all of its employees.

However, due to each company being unique and consisting of a wide variety of personalities, each company will have different results when testing unlimited vacation time on its employees. Therefore, the effectiveness of this vacation policy will not be universal for all companies around the world but by a case-by-case basis for each individual company.

Author: Brian Anelante works in the marketing department at, an occupational health organization that specializes in Employee Screening. Mobile Health sees 200,000 people a year for Employee Screenings and we are the leading occupational health provider in New York City.

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