Tuesday, June 21, 2016

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.


  1. Delighted we have our View back!

    It won't make big news, but we have this policy here at DiMassimo Goldstein. And I remember it being proposed, considered and rejected all the way back in the early 1990s at K&B. Frankly, companies love it because it sounds like a great benefit while it doesn't really change much for employees. They still fear taking off. In fact, the lack of a specific allotted entitlement means many feel less comfortable about taking time. And it tends to further blur the line between work time and vacation time, which many people find stressful and overwhelming. On the other hand, companies aren't on the hook for accrued vacation time because under this system there is no accrued vacation time. The day before you leave, you have unlimited vacation, the day after you have zero. Because of these benefits (to the company) and because employers have learned that these policies have little effect on the behavior of their most dedicated employees, this approach is increasingly adopted. Those who really want to get people to take more vacation, enjoy more downtime, and recover better, like you and me, will still need to invent better ways to inspire those actions. This alone doesn't do it.

  2. Great article Paul. For all the press about “flex-time” and “paternal leave”, you’re the first I’ve ever seen write about the importance of vacation time … probably the most valued “cushion” for anyone. In my case, since moving exclusively from front-line account management to new biz development 20 years ago, I have always tried to time my four weeks of vacation around when “things” were dead. Weeks of the July 4th, Labor Day, and Christmas/New Year holidays, for sure. Then random holidays of personal importance to me, e.g., Good Friday and Veteran’s Day. Any time left after that, I’d grab on an ad hoc or “as needed” daily basis – sometimes even by the hour. But always with my business obligations in mind and never to leave my agency team or client prospect ”hanging” for an answer or contribution. And while I’ve always enjoyed the benefit of working for enlightened agencies that appreciated my weekly 80-90 hours of non-stop effort (including weekends and vacation days), there was one that didn’t, and it cost me my job. But was OK with me, since they were busy counting hours in the office instead of results. So, again, good for you with this post. Maybe you’ll wake some people up – but don’t hold your breath. Meanwhile, so glad to see you back in the saddle.


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