The "trap" of unlimited vacations offered by some companies - Start Up Gazzete
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The “trap” of unlimited vacations offered by some companies


A job where you can take as many days off as you want? It sounds great, until it isn’t.

Investment banking firm Goldman Sachs took a remarkable step a few weeks ago: It gave unlimited paid vacations to its senior staff.

According to a memo seen by various media, partners and CEOs will be able to “take time off when necessary without a fixed entitlement to vacation days.”

Junior staff received two more annual days off, and the company said all workers had to take a minimum of 15 days of vacation each year.

At first glance, it seems like a positive move from a company known for its grueling work schedules and demanding culture.

After all, unlimited paid time off (UPTO) could allow overworked staff more time to rest and improve their mental health and overall work-life balance.

Additionally, a generous vacation policy for top positions could trickle down to the workforce at large, potentially making staff happier and more productive overall.

However, what sounds like an incredible benefit comes with important caveats.

Whether workers take a decent amount of vacation time tends to depend on whether companies create an environment that encourages them to do so.

In some companies with UPTOs, workers end up taking fewer vacations, not more, due to peer pressure and perceived expectations around the ‘acceptable’ number of days off.

On the other hand, the most recent data shows that UPTO is not the benefit most coveted by workers; Instead of an unlimited number of vacations, most people value flexibility , including the option to work from home.

Is this benefit something workers have always wanted, or a gift no one asked for?

Beach, children, health…

The idea is simple: instead of a fixed number of paid vacation days each year, workers are given an infinite number of days as long as they agree vacation periods with their boss.

The policy is intended to give workers more autonomy to manage both their workload and their personal lives, which could lead to increased well-being that is in the interest of both the employee and the company .

Unlimited vacations have become much more common in recent years.

Netflix headquarters in California

They originated in small startups in Silicon Valley, and spread to big companies like LinkedIn, Netflix, and Bumble, and now, to Wall Street.

However, they are still rare; data from a 2021 survey shows that only about 4% of US companies offer them.

US-based Society of Human Resources (Shrm) President and CEO Johnny C Taylor Jr says he and his colleagues prefer the term “open license” because it more accurately reflects the benefits of UPTO .

” It doesn’t necessarily mean unlimited weeks on the beach ,” he says.

“Sometimes it’s about accommodating parental needs, recurring checkups, or even time for mental health,” allowing workers to take time off how and when they see fit.

Confidence and freedom?

Some companies have reaped the benefits of UPTO; many workers at manufacturing giant General Electric have responded positively.

Netflix CEO Reed Hastings detailed in his 2020 book that while UPTO took years to nail down, he eventually discovered that ” freedom shows employees that we trust them to do the right thing , which in turn encourages them to behave responsibly.”

However, there are also a number of companies that have experimented with UPTO only to abandon it and declare it a failure.

empty chairs
Many do not dare to change their desk chairs for more relaxed ones.

Workers often end up taking less time off than with a fixed policy.


A 2018 survey showed that workers with UPTOs took fewer vacations than those with a fixed allowance; according to another survey, a third of American workers with UPTO always work on vacation.

That happened in the US-based networking company Facet which left UPTO.

Similarly, the CEO of London-based recruitment company Unknown went viral in a LinkedIn post explaining that the company canceled its UPTO scheme as people felt guilty and never take time off ( now give 32 paid days off at all ranks).

Part of the problem is that, at some companies, taking vacations is something that many workers don’t do often enough, a phenomenon particularly pronounced in the US.

“People don’t take vacations even when they’ve accumulated,” says Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School of Business and director of its Human Resources Center.

“The reason is that there is pressure for them not to do it.”

Granting unlimited paid vacations does not make these problems go away; in fact, it can make them worse.

Better for whom?

Exhausted worker in elevator

With UPTO, workers are technically not owed vacation days, as there is no fixed number, and everything must be agreed upon by the boss on a case-by-case basis.

To establish the ‘right’ amount of paid time off to ask for, employees often rely on observing the behavior of their colleagues and bosses.

If colleagues only take 10 days off a year, asking for more might seem inappropriate .

Companies that embrace UPTO, says Cappelli, have “moved from a model where you accumulate days off, so you actually owe them vacation time, to one where [they have to] ask for it.

“And there’s nothing to stop your boss from yelling at you if you want to take more time off, or punishing you if you do .”

In addition, UPTO removes the safeguards that protect workers’ interests if they cannot take time off: there are no days left over that workers are legally required to take before the end of the year or carry over to the next year.

There’s also nothing workers can collect if they quit and have days to spare, which Cappelli says saves companies money.

change is slow

All of this means that it is crucial for a company to have a work culture that promotes balance if it is trying to implement unlimited vacations, something Goldman Sachs, like other companies in the financial industry, has traditionally not been known for.

tired worker

“If a company introduces UPTO but the culture continues to thrive on overwork, implementing a new policy is not going to change that overnight. The company needs to encourage downtime, and managers need to model it in their own lives,” says Shrm’s Taylor.

That could take time, though, considering most senior staff at many big Wall Street firms hone their skills in the grueling financial culture.

Also, many executives still work during the holidays, so it’s not clear how realistic it is for bosses to really set an example for young employees.

But it is also significant that, for those lower-level employees, Goldman Sachs has given them more fixed UPTO days and also mandated that they take at least 5 consecutive days off of the 15 they have each year .

Such moves could be “sincere” to address problems in Goldman’s workplace culture, though it may not be exactly the kind of flexibility some of those young workers want, says Sonia Marciano, clinical professor of management and organizations at Stern Business School. , from New York University.

While additional vacation benefits like UPTO are a start, experts warn that the discussion about changing the strenuous work culture is far from over.

“This is a work-life balance story,” says Alec Levenson, a senior research scientist at the University of Southern California Marshall School of Business.

“Throwing in some fringe benefits without addressing some of the fundamental issues around how hard and how long employees have to work doesn’t change the game .”

This article was originally published in English by BBC Worklife . To read the original article click here



  • Bryan Lufkin
  • BBC Worklife
Author avatar
Joshua Smith

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