Unlimited Vacation: Blessing or Curse?
I don’t usually get into discussing workplace stuff because it’s relatively boring. However, Unlimited Vacation is one perk that is really, really needs discussion. Let’s explore.
Perks and Jobs
I get it. I understand why companies offer perks. They have to offer perks for talent acquisition reasons such as:
- Companies must keep up with competition — If a company doesn’t keep up with what other companies are offering, they lose talent during recruiting
- Companies must offer perks that seem inviting — Again, this is a talent acquisition feather-in-the-cap sort of thing. It’s something the HR team can cross off the checklist of things to entice candidates
- Companies must offer perks that are inexpensive — Companies don’t want to give away the farm to offer a specific perk
What kinds of perks can you typically find in tech companies? You find perks like the following:
- A stocked kitchen — This includes soda, coffee, tea, milk / cream and then for food, this can include fruit, nuts, chips and cereal
- Bagel Friday — This perk includes donuts and bagels on Friday
- Lunches — Some companies offer subsidized and/or free lunches one or several days of the week
Those are all food related, however, other perks include:
- Day Care or reimbursement
- Commute expenses
- Free parking
- Tuition Reimbursement (job related)
- Training / certifications (job related)
- Paid sick days
- Paid vacation
- 401k
- ESPP (if public company)
- Company holidays
These are the HR type of benefits that many companies offer. Many of these have a real dollar based cost to the business. However, there’s a new perk that seems great, but really isn’t for several reasons. That perk is ….
Unlimited Vacation
This ‘perk’ (and I use this term loosely) is now becoming popular in businesses. Why? Because it doesn’t cost the business anything to implement and may actually save the company some money (or so companies think). On paper, the idea seems enticing, in reality it’s a pointless benefit to employees and actually encourages more employees to take vacation which may hinder productivity and deadlines.
Why is this benefit so bad? This benefit is pointless because there is no way any employee can actually use it in its unlimited capacity. If you were to try, you’d be fired and walked from the building. I don’t know of any business that doesn’t require approval for vacation from a manager. Even if you could request excessive amounts of vacation, it’s unlikely your manager would approve it. But, within reason, you can request time off and here’s where it begins to break down for employers.
The only people who can even use this benefit as unlimited are those who are in management positions, who don’t have to report their own vacation usage. In other words, subordinates won’t be able to use it, but managers will (and they will use it frequently).
This is one of those perks that will be abused by those in charge. Those not in charge will be penalized whenever they attempt to use it in any unlimited way.
Vacation Time
In general, asking for vacation time off is tricky. It must always be coordinated with ongoing projects, team commitments (i.e., on-call), other team member time off and holidays and requires manager approval. Even people who end up out sick can interrupt or force rescheduling of vacation time off.
Don’t be tricked by this perk, it doesn’t make vacation time off any more accessible and, in fact it is entirely designed entirely for …
Ripping off Employees
There are two fundamental problems with Unlimited Vacation. The first problem is that the benefit (ahem) is being implemented as a cost saving measure to rip off employees when they leave a company (and is designed to appear to save the company many thousands of dollars). This issue really only affects long term employees. You know, the ones who have devoted several years to your business. But now, you’re going to give them the finger on the way out the door? Smart.
With standard paid time off (PTO), you are allotted a certain amount of hours that accrue over time. Let’s say for every year of service that you complete, you will accrue up to 1 week off (with a maximum of 2 weeks that can be held in total). After 2 years of service, you’ll have those 2 weeks accrued, assuming you never take time off. If you leave the company after 2 years without taking any vacation, you’ll be paid out your accrued PTO balance for the 2 weeks that you didn’t take. That’s two weeks worth of salary you’ll receive upon exit, in addition to any other salary owed.
With Unlimited Vacation, that vacation payday goes away. Since it’s now unlimited, there’s no more time accrued and no more PTO to pay out for any employee. The only thing that payroll needs to keep track of is how much time you’ve used solely for timekeeping purposes. When you exit a company offering Unlimited Vacation, you won’t receive any vacation pay because they are no longer accruing any. This means that when you were formerly paid 2 weeks of PTO, with Unlimited Vacation you now get $0.
Unlimited Vacation is then an HR cost-cutting measure entirely designed to screw exiting long term employees over so companies no longer need to make any vacation payouts.
Here’s where the second problem begins. As employees realize this screw-over job and to make up for the lack of accrued time, this means employees will need to take as much vacation as is allowed without getting fired in the process. Since you can’t accrue, you now need to use.
Accrued PTO vs Unlimited Vacation
Businesses don’t seem to understand the ramifications of this perk on its workforce. The first ramification is that employees with accrued PTO no longer get the exit vacation payday. This is significant when exiting your employer and moving on. But, this only occurs on a termination event. Employees should remain cognizant of this event, but even more employers should remain cognizant of how this will change how vacation is used. As an employer, it means you need to understand how to retain your workforce better.
Here’s the second problem in a nutshell. PTO encourages employees to stockpile their vacation and rarely take it. Up to 50% of the workforce does this. However, Unlimited Vacation encourages employees to take as much vacation as they can legitimately get away with.
With PTO, employees might work and work and work with little time off. With UV, more employees will take more time off, thus working less. This is something that HR and management will need to understand about this benefit. If the point is to get people to take more time off, then UV is the answer. If you’re trying to encourage people to stay at their desks and work, PTO is the answer… but has the end payout.
It really all depends on how you want your staff to work. If you want people at their desks not taking time off, then PTO is your answer. If you want people constantly taking time off, then UV is your answer. Sure, UV saves you on the exit payments, but at the cost of people taking more time off throughout the year. It does one more thing.
The up to 50% of employees who rarely take time off will change their work ethic to include significantly more time off. Since they know can no longer stockpile and get that payday when leaving, they will now be encouraged to take time off to make up for that loss of money. This means that a workforce that you relied on to work excessive hours to make ends meet will no longer continue that trend in your business.
If you think that people will continue the same type of vacation behaviors they used with PTO when on UV, you’re mistaken. People will use what they are owed. If they are encouraged to take time off, they will whenever possible. This means that for the folks who rarely (if ever) took PTO days will now begin scheduling more time off throughout the year. That’s not because it’s unlimited, but because they understand that they no longer get the payout at the end. This compromise ensures they get the equivalent benefit and that means scheduling and taking time off. There’s entirely nothing the HR team can do about this change in vacation usage behavior when on the Unlimited Vacation plan.
It’s a use-it-or-lose it situation. If you never take vacation with PTO, you can justify it with the payout at the end. If you never take vacation with UV, not only do you get no time off, you get no payout at the end. It’s simple math. No payout at the end means using more vacation time to get the equivalent benefit. Employees aren’t stupid and they will realize this paradigm shift and compensate accordingly.
This outcome will happen. You can even watch your employees behaviors after you convert from a PTO to UV system. I guarantee, your employees will notice, understand and modify their vacation schedule accordingly. This may impact your business, so caveat emptor.
Good or Bad?
That’s for each company to decide. More employees taking more vacation is good for the employee and their morale. But, it may negatively impact the productivity of your business. With PTO, people not taking vacation means more productivity. With UV and more vacation time off, this likely means less productivity. It might mean a happier and less stressed workforce, but it likely also means less work getting done.
I’m not saying any individual will take excessive time off. No, I’m not saying that at all. That’s simply not possible. What I am saying is that if 40-50% of your workforce never takes time off under a PTO plan, you will likely find that number reduces to less than 10% of your workforce not taking time off with a UV system. That’s a significant amount more people taking time off throughout the year than on a PTO system.
If you delude yourself into thinking employees who don’t take vacation time off will continue a PTO trend on a UV plan, your HR team is very much mistaken. I can also guarantee that if managers deny vacation requests to keep employees at their desks, this too will backfire and your talent will leave. This will become a catch-22 problem in your business.
As an employer, you spend a lot of money hiring talent. You also spend a lot of money holding onto that talent. Why jeopardize all of that with a policy like UV that won’t really do what what you hoped it would? On paper, it seems like a great cost saving policy. In practicality, it will likely backfire on your company’s productivity efforts and cost you more money in the end, but not for the reasons you think.
Conversion Process
You may find that if you are converting from some other vacation system to unlimited that people do continue their traditional habits. However, that will change over time both as turnover happens and as people realize their loss of PTO payout. Once employees wake up to the realities of the new system, the amount of employees requesting and taking vacation will increase.
A UV policy will make it more difficult on the managers to juggle vacation timing, fairness and who can take what when. This will increase manager load by taking them away from managing projects and deadlines to managing the minutiae of juggling even more staff vacations.
Hourly Employees versus Salary Employees
This type of perk works best in salaried environments. With hourly employees, trying to offer a perk like Unlimited Vacation won’t really work well. This is particularly true of employees working in a call center or similar type environments. With salaried tech workers, this kind of benefit may work for you with the caveats that have been thus far described.
Startup or Established Company
If you run a startup, you should stay away from the Unlimited Vacation policy entirely. It won’t do your business any favors. Sure, it’s more cost effective, but only when long term employees leave. If you’re a startup, you won’t have long term employees to worry about for a while. Your duty is to entice your talent to stay, not leave. If you have a problem with a revolving door of staff, then you have a much bigger problem than a benefit like Unlimited Vacation. The problem for a startup is that a UV plan encourages more people to take vacation more often rather than stockpiling it for use later. Again, more workload for a manager to juggle vacation schedules rather than handling projects and deadlines.
In a startup, a UV policy means more people taking time off. This isn’t what you want when you need all hands on deck to keep the business afloat. You want most people at their desks and readily available at all times. When people take vacation, they expect to be cut off from their job including no email, no pager and no contact. And, rightly it should be. If you’re on vacation, you’re on vacation. PTO plans encourage staff to accrue now and take time off much, much later, perhaps years later. With a UV plan, this encourages more people to take vacation regularly. Not exactly what you need in a startup. PTO works for a startup because employees stockpile and then once the business is off the ground years later, they will then take their vacations. This is why PTOs are actually better for a startup than a perk like UV.
If your business is established with 500 or more employees, then implementing an Unlimited Vacation policy might be worthwhile depending. With larger numbers of staff, there’s more opportunity for someone to cover an employee who’s out. This means if your 40%-50% staff who are stockpiling decide to start taking vacation in increasing numbers, you can withstand this change in your workforce behavior.
It’s up to you to decide how to operate your business, but PTO vs UV is one perk you should thoroughly investigate and then weigh all pros and cons before implementing it. Don’t do it simply because it might (or might not) save you some cash when employees exit. Do it because it’s the right plan for your business’s current operating goals.
Job Hunting? Don’t be scammed.
As the economy is floundering and unemployment rates remain high, there are those people and companies who look to take advantage of job seekers. Some companies are legitimate, others aren’t so much. So, let’s investigate some ways you can avoid being taken during your job hunt.
Pay to play
Be extremely wary of so-called for-pay outplacement, consulting or career management companies that require up-front payments before you get a job. These companies will sometimes promise they will find you a job, but in the end you literally end up doing all of the work and you’ve paid them to let you do your own work! In fact, it’s work that you would have done without paying them anything! These companies may operate by taking a percentage of your expected salary. For example, if the job you are seeking has a $60,000 a year salary, they may expect $6,000 (10%) as your up-front fee.
Don’t be fooled by this practice. Yes, they may give you career advice or even write you a new resume, but is a new resume and some career counseling worth $6,000? You will find many resume creation sites (and software) on the Internet to makeover your resume that costs much less than $6,000.
These outplacement companies may also claim that they have ‘databases’ of jobs. The reality is that their database may be months old or non-existent. So, even though they have a database, what good does it do to apply for a job that was listed 6 months earlier? It doesn’t do any good and is definitely not worth $6,000.
Recruiters
While recruiting companies are not necessarily scams (although, the possibility always exists), most of them feel very slimy when you work with them. So, be cautious and here’s why. Recruiting firms supposedly have job databases and find candidates that fit various job roles. Unfortunately, the recruiting agents work on quotas. So, they must close a certain number of jobs over a period of time in order to 1) get their commission and 2) remain employed as a recruiter. After all, the commission from the candidate’s placement is what keeps the recruiting company in business. A recruiting position is both a sales position (has sales quotas to meet) and as a recruiter (help you find a job). Unfortunately, there’s just a little too much conflict of interest with recruiters. The trouble comes because the employer pays the percentage fee after candidate placement is complete. So, while it may appear that they are helping you, the candidate, they are really more partial to the employer because that’s where their bread is truly buttered. When unemployment is high, they can find many candidates, but they only have that one position open.
So, the recruiter will do everything to keep the employer happy and, in most cases, couldn’t care less about the job seeker other than to get them placed. After all, there’s plenty of job seekers from which to choose. That said, they will definitely appear to care about the candidate so long as the hiring company still takes an interest in the candidate. Once the hiring company no longer expresses interest in the candidate or fills the job, that’s when the recruiter calls stop, emails stop and you can no longer reach the recruiter at all.
One other tactic of recruiters is to obtain resumes. So, if you had an old resume on file at a recruiting firm, expect to be called periodically to update your resume. The recruiter who calls you may even imply there may be jobs open with your skill set. In many cases, you are just feeding their database with another resume. In fact, they very likely had no job opening. Again, the recruiters have their job performance tied to doing work. Having spoken with you and obtained your updated resume probably suffices for one in their quota. Be wary of this practice. You’re helping them keep their job, but they may have no intention of helping you at all. They’re just stringing you along.
One other recruiting tactic to watch for is the phantom job tactic. The recruiter will claim to officially represent the hiring company. They tell you a job is open and that they are requesting a resume to submit. They will even put up a front and tell you they have submitted your resume for the position. Then, you never hear back from them. Why? Because they lied. They had no position open. They didn’t have any official status to represent the hiring company. So, how does this happen? Again, this is a quota issue. They need to make quotas, so the recruiter will string you along hoping the hiring company will agree to use the recruiting firm and then pay the commission. Unfortunately, the recruiting firm has not officially contacted the company until after they had your resume in hand. The trouble is, they didn’t have the company’s permission nor blessing. So, the recruiter contacts the company and the company says, “We don’t work with recruiters, sorry”. End of discussion.. no more contact. There is no way to really ensure the legitimacy of what a recruiter tells you. But, it certainly is a waste of time.
In the case of a recruiter, you necessarily won’t be out any money, but it can certainly take away valuable time that you could otherwise be seeking direct opportunities, submitting resumes or even updating your resume. It’s easy to get bogged down in recruiter time suck activities. So, be wary when recruiters come knocking.
Craigslist and Classified ads
While classified boards like Craigslist are great places to find job opportunities, it’s also a place to get scammed. So, if you choose to look for jobs in classified ads, make sure that you verify the company you are contacting. That means, check the phone book or the Internet to ensure that the phone numbers and addresses actually match the hiring company’s office address. You don’t want to end up in some seedy dive on a fake interview or being taken for some amount of money. If any money is involved before you get a job, walk away. There are way too many sites that can help you find jobs without fees.
Fee Based Job Boards
Some well known web employment listing sites charge subscription fees to help you find jobs. While I understand this web business model, the job seeker is most probably out of a job when seeking new employment. So, while paying monthly subscription fees might seem worthwhile, you may end up having no better luck in finding a job than using free services like Hotjobs, Dice or Monster. So, be cautious when asked to supply a credit card number to get access to a bigger database or get access to employment ‘review’ services. If you want to spend money, that’s up to you, but I’d recommend exhausting all other free avenues (and believe me, there are plenty) long before you throw your money away on for-pay job boards.
If you are months into your search and still have no leads after trying all of the free sites, then and only then would I try a for-pay job board. Some of these boards offer one month subscription periods. I’d recommend trying these job boards by paying for only one month and see how well it works for you. One month should be well long enough to dig through their database, submit resumes and see if you get any nibbles. You may find that it does nothing. Also, make sure that after the one month payment ends there are no recurring subscriptions still active. You don’t want to get any surprise fees on your credit card statement the next month.
Avoid the scams
If something looks too good to be true, it probably is. When seeking a job, you want to avoid being scammed out of whatever money you have… especially when unemployed. So, be cautious if a web site asks you to load a credit card number into their registration page. In short, don’t do it. If they require a credit card number to sign you up, skip that site and move on. If you do decide to part with your credit card number to get access, be sure to fully read all of the sites disclosures to understand how they charge for their services. If you can’t find how they charge for services, skip the site.
Good luck in your job search.
Recruiting: Job seeker’s friend or foe?
I have been successfully placed by a recruiter once in my career. After that, I’ve had nothing but bad experiences with recruiters. The main problem with recruiters isn’t necessarily with the recruiting itself. It’s the human element that always gets in the way. Let’s explore.
Recruiter’s Bottom Line
A recruiter’s bottom line is the commission that they receive upon placing a candidate. This commission, unfortunately, drives the entire placement process. When a recruiter’s sole motivation is based on money, the candidate and the hiring company both get the short end of the stick.
Case in point, I have used recruiters for the last two or three jobs I’ve attempted to land. In nearly every case, the recruiters misrepresented the job to me in the phone interviews. When a recruiter sent me to an interview, I quickly found the job was not a match for my skills. Basically, the job was entirely wrong based on my skills or I had specifically told the recruiter not to place me in that industry or job type. Yet, there I was, interviewing for a job where I shouldn’t have been.
This ends up a wild goose chase. When I explained the problem to the recruiter, they turn defensive and blame me for a ‘bad interview’. It wasn’t bad, it was just a mismatch because of the recruiter’s lack of skill or inability to listen. Of course, this all comes back to the commission. Once the commission dollars become a reality in their mind, the recruiter puts blinders on. They then attempt to force a square peg into a round hole to avoid losing their payday.
Sincere Recruiters?
That’s not to say that there aren’t sincere recruiters out there. I’m sure there are some. However, the recruiting industry is so filled with inexperienced recruiters only willing to make a buck that you can’t tell the difference between who is sincere and who isn’t. It’s not like recruiting is regulated or has any grading system. So there is no method for you, the candidate, to determine just how a specific staffing firm works.
The one recruiting game that gets to me is when recruiters simply resume collect to fill a database, but have no intention of placing you. Robert Half (RHI) is notoriously bad for this. They’ll collect your resume, ask you to step into their offices for a ‘face to face’ and additionally ask you to spend an hour or longer filling out paperwork. After you’ve spent all of that time doing this for them, they never call you back. That’s such a waste of time. Instead of wasting a day at their offices, the candidate could have better spent that time sending out resumes to actual employers and going on legitimate interviews with direct employers.
Recruiting Tactics
Other tactics from recruiters include the recruiter finding a job posting on the Internet, collecting resumes and contacting qualified candidates. Only after they have the candidates in hand do they then try to lasso in the employer. They string the candidate along thinking they have a chance at the position when they haven’t even talked with the hiring company about the position. Once the hiring company turns down the recruiter, this is when the recruiter stops calling the candidate and stops taking calls.
This recruiting scam is yet another colossal waste of time. These scams should be very apparent once you get two or three recruiters calling to recruit for the same hiring company and the same position. In a typical recruiting engagement with a hiring company, the hiring company only allows one recruiter to recruit for the position, not multiple. When multiple recruiters are recruiting for the same position, either the hiring company doesn’t understand the recruiting process or, more likely, the recruiters are not on retainer.
Ask Lots of Questions
When choosing to work with recruiters, be cautious and ask lots of questions. A recruiter does attempt to be the candidate’s advocate, but usually only to the point that they don’t lose their commission. If losing their commission becomes a reality, recruiters can become desperate in the relationship between the candidate and the hiring company. In fact, a working recruiter relationship can turn sour in about 30 seconds once the candidate or hiring company expresses disinterest. This is when the recruiter’s professionalism is tested. If the recruiter keeps pushing the candidate or the hiring company after disinterest has been expressed, that behavior is not professional. It also shows just how much the recruiter values their commission over a properly filled position.
For a recruiter, it’s much more valuable to place a qualified candidate in the proper position than collect a recruiting commission. But, many recruiters turn desperate when their square peg won’t fit into their round hole. On the other hand, some recruiters just don’t care. They’ll attempt to place anyone in any position just to fill their required quota.
Recruiting Advocacy
It can be difficult to find a recruiter who is actively willing to work on your behalf as a candidate. If you find one, stick with them. Keep in mind, however, that they are all working on commission, so their placement of you fills their (and the recruiting firm’s) bank account. That money motivation can cause the recruiter to do things they would not otherwise do. Finding the most suitable job for you should be their number one priority. Unfortunately, this isn’t always the case.
Only you as the candidate can look out for your own best interest. If you find a recruiter has misrepresented a position, then walk away from the recruiter. You can, however, submit a direct resume to that employer IF the recruiter has disclosed the employer’s name. However, some recruiters refuse to disclose the prospective employer’s name until after you already know the job is unsuitable.
Recruiters: Friend or Foe?
To answer this question specifically, they can be both at the same time. As a candidate, you will need to keep your eyes and ears open. As a candidate, you must listen, ask questions and understand what the recruiters are telling you. You must also be able to read between the lines to understand if the recruiter is feeding you a line of bullshit or telling you the truth. Having a truth meter is important when working with recruiters. You should also always remain skeptical when the recruiter tells you something that seems too good to be true.
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