Unlimited time off? Companies are giving some workers the option
Programs offer balance against individual duties, help employees build level of trust
A year after rolling out a “responsible time-off ” program that allowed employees to schedule as much time off as they liked (within reason), insurance brokerage Holmes Murphy reports little change in the time employees spend away from work.
“It’s pretty similar to what they were used to doing,” said Heidi Buttolph, the company’s chief engagement and talent officer. “We haven’t seen it being taken advantage of nor have we seen people taking less time as a result of it.”
Even so, employees loved the change, she said.
The program empowers workers to balance the time they need off for weddings, doctor appointments and vacations against their individual work duties, Buttolph said.
“I do believe it kind of goes back to the whole idea that they’re not having to manage to a bank of time,” she said. “They have this feeling that they’re being trusted.”
After offering a paid time-off program for 17 years, many employees had amassed valuable PTO days. Holmes Murphy allowed workers to cash in the financial value of that benefit immediately or over time, Buttolph said.
“That choice was in their hand,” she said. “So it wasn’t like they felt like they were losing what they had banked.”
Over time, moving away from a PTO program to a flexible-timeoff plan could provide cost savings, Buttolph said, as the company relinquishes the ongoing costs of workers banking in PTO as they resign or retire.
The West Des Moines-based company rolled out the responsible time-off plan within the context of a wider work culture, Buttolph said. The brokerage has made efforts to appeal to younger workers. “Our whole work environment is evolving,” Buttolph said. ‘PEOPLE AREN’T USED TO THE IDEA OF SOMETHING CALLED UNLIMITED VACATION’ Unlimited time-off plans are the darling concept of nimble, techcentered companies such as Netflix and LinkedIn.
But the idea has expanded beyond the bubble of Silicon Valley, which is rich with unique employee benefits such as free catered lunches, table tennis in the work space and flexible work schedules.
In 2015, General Electric, No. 13 on Fortune magazine’s ranking of the nation’s highestrevenue companies, rolled out an unlimited vacation plan for its salaried workers.
And several Iowa firms have rolled out the feature in recent years.
Dwolla, one of the most storied firms in the Des Moines start-up scene, has offered unlimited time off since its inception.
And now, Principal Financial Group, one of the largest employers in the region, is rolling out a flexible time-off plan.
Many employees love the idea of unlimited time off, said Mi- chelle Williams, an assistant professor who researches employee benefits at the University of Iowa’s Tippie College of Business.
But it does require a shift in the way workers think about time off: With unlimited time off, it’s no longer of financial value but more of a lifestyle benefit.
“That’s where you might see a generational difference in the perception,” she said. “As employees come out who put more emphasis on lifestyle and health and flexibility, that’s going to be helpful.”
Though employers continue exploring unlimited vacation plans, Williams said, only about 1% of the nation’s largest companies have adopted them. And so far, results have varied. At some companies, employees take off similar amounts of time as they did under traditional vacation programs, maybe adding an extra day or two in a calendar year. At other places, employees had no idea what was appropriate and ended up taking off less time than in previous years.
Fundraising site Kickstarter famously discontinued its unlimited vacation plan in 2015, instead offering employees a flat 25 days off per year.
“People aren’t used to the idea of something called unlimited vacation,” Williams said. “Some people have found that people actually take one or two less days because there’s so much uncertainty.”
While some companies may move away from traditional PTO plans as a cost-cutting measure, Williams said the unlimited plans are only successful if a company’s culture encourages employees to take time off for their own wellbeing.
“It’s a way for the organization to communicate a set of values and a different type of relationship with the employee,” Williams said. “This isn’t transactional tit-for-tat. This is saying, ‘I will invest in you and I expect you to invest in me.’ ” ‘WE’RE JUST SAYING WE TRUST YOU’ Principal Financial Group is phasing in a flexible time-off policy for all its salaried, non-exempt employees, which make up about two-thirds of the insurance company’s workforce.
“We’ve said the amount of time you’ve taken in the past, if that’s worked for you, that’s going to work for you in the future,” said Polly Heinen, Principal’s assistant director of benefits. “We’re just saying we trust you. We know you’re an adult and an employee we value, take the time you need.”
Principal employs about 6,400 people in the Des Moines area and nearly 15,000 worldwide.
Heinen said she isn’t concerned that workers will abuse their newly granted flexibility. In fact, they have the opposite concern: that employees aren’t taking enough time away from work.
“We’re trying to drive culturally that if you’re not taking at least three weeks off per year, you’re not taking enough,” she said. “We believe that to do your best, both personally and professionally, you need at least three weeks off.”
Principal plans for all salaried workers to be enrolled in the new plan by 2019. Company officials declined to discuss how the change will affect current employees’ accrued time off.
Like other plans, Principal’s flexible time-off program isn’t meant to meet all time-off requirements.
The company maintains separate offerings for family and medical leave, holidays and parental leave. And, employees must still work with management to schedule time off. ‘MOST PEOPLE KIND OF SELF-REGULATE’ Jenna Hogan, director of human resources for Dwolla, says employees there view the flexible time off plan as a privilege.
They know which busy times of the year to avoid and how to manage within their own deadlines.
“Most people kind of self-regulate. And they know when they can and can’t take off,” she said. “You build that trust that if you need it you’re going to take it. And making people comfortable to take that time is probably the underlining element there.”
Many employees end up taking off about the same amount of time: two to three weeks each year on average. The work schedule is also flexible.
Some with families may work until 5 p.m. to get home by dinner. Other younger workers may not come in until 10 a.m. and stay until 6 or 7 p.m.
Plus, the place doesn’t empty out at the end of the year with workers aimlessly burning their accrued time off.
“That’s not staring you in the face here at Dwolla,” Hogan said. “It’s not like I need to take so many days before Dec. 31.”
Stacey Singleton, regional vice president for staffing firm Robert Half, says unlimited time-off plans are still rare in the Des Moines metro. But more companies in a variety of industries are signing on.
“They’re all over the place,” she said. “They’re small companies. They’re large companies, they’re tech, they’re insurance. It runs the whole gamut.”
Vacation time is the second most negotiated item when hiring, next to salary, she said. So unlimited time-off plans can streamline the hiring process and help recruit talent away from other companies with traditional plans.
“We’ve heard that it’s pretty easy to implement. People are excited about it,” Singleton said. “Now it’s up to the employee to get their projects done and be productive because they can take unlimited time off.”
“We’re trying to drive culturally that if you’re not taking at least three weeks off per year, you’re not taking enough. We believe that to do your best, both personally and professionally, you need at least three weeks off.” Polly Heinen, Principal’s assistant director of benefits