Progressive Companies Are Moving Towards Unlimited Vacations

The announcement recently by LinkedIn of moving to an unlimited vacation policy (DTO – Discretionary Time Off) was music to my ears.  All business ought to take notice. It will improve productivity, increase employee loyalty and retention and save money.

LinkedIn joins a growing list of companies to adopt this policy.  Among the other companies doing this are Virgin Atlantic, GE, Groupon, Netflix, Survey Monkey. The Some of the statistics surrounding this policy are surprising.  Start with this:  61% of American workers report working while on vacation.  It makes sense – these days we are all always connected.  For many, many years I have been recruiting and working with companies and candidates while I am out of town.  It doesn’t bother me and it doesn’t disturb my R&R. Senior executives have to be available to make decisions and continue their work.

The other surprising statistic was that Americans only take 52% of their entitled vacations.  What companies such as LinkedIn have discovered is that this DTO policy increases productivity and profits. Their people at every level are paid to be productive and are measured by their output.  Much has been written about productivity going up when workers take vacations and come back to work refreshed and relaxed.  And one reason DTO is more profitable is that when employees leave they do not have to be paid for unused vacation time.  Ad agencies, which are always looking for ways of cutting costs can learn something from this; because of the high turnover in advertising, I am sure that unused vacation time costs agencies a fortune.  It is one of those hidden expenses which actually can be reduced with a DTO policy.  

The first ad agency to adopt this policy will achieve a public relations coup - and a lot of loyal and happy employees.

In 2011, I wrote about vacations increasing productivity.  I have always believed this.  Unfortunately, I received many private emails from advertising executives who told me that in their environment, vacations were frowned upon and impossible to take. Last year I wrote that I thought that executives should not have to abide by a strict vacation policy.  The essence of that post was that executives can often work extraordinary hours – eighty and 90 hour weeks are common - sometimes going weeks without a day off. Counting vacation days for these executives is an insult.  Clearly, there are a number of progressive companies that agree with a DTO policy.

Executives in advertising are paid by the year, not by the hour, day or week. They are paid to produce.  Their output is judged by how well they do their jobs.  No productive employee should be evaluated by whether they take needed time off.  Vacation time does not and should not detract from productivity.

The irony of vacations is something I observed when I worked for companies. When I took two consecutive weeks off and returned, most projects were still pretty much where I left them.  Oh, sure, some projects moved along, but they were pretty much finished before I left for vacation.

Many executives are actually afraid of taking time off. I have seen reports that people are fearful that it will be discovered that they are not necessary if they take time away from the office.  That is absurd.  And executives with this attitude need a good shrink.

I am a big believer in time off and time away from the office.  After the economic crunch a few years ago, most of the network agencies cancelled summer Fridays. It was a stupid move since senior executives still take them anyway. Taking a summer Friday does nothing to interfere with output and productivity.

Ad agencies should take a cue from the companies which practice DTO.