How Does Unlimited Vacation Days Effect Productivity?

Posted by Joseph Sherren on June 18, 2018

Summer is almost here and organizations and employees are now seriously thinking about getting away.  But, vacation is being re-defined in a way that managers could never have imagined years ago.  The new policy is – “There is no policy!”  Take as much vacation as you want.  At first glance, this seems like a very dangerous practice.  Won’t employees take advantage of you?

Statistics have shown that the answer is NO.  In fact, it is just the opposite.  Even now, many employees are not taking the vacation time they have earned.  This is not the problem that one would expect, especially with the newer workers.

A recent Ipsos poll finds that 59 percent of Canadians aren’t sure if they’ll take a vacation. Of that, only 54 percent have vacationed in the past year and 33 percent say it’s been at least two years since their last vacation.

The same poll finds that Canadians with paid vacation allowance are entitled to 21 days off, on average, but are only taking 17.

In the USA last year, workers failed to use 212 million earned vacation days.  What makes this worse, these vacation days could not be carried over to subsequent years.  That suggests companies were able to save almost $62 billion in bottom line costs thanks to dedicated employees.

Many people don’t use their vacation because they are concerned about how co-workers will perceive them, even though data shows that taking time off actually makes people more productive, as well as improves their health.

Nine of the top 10 most productive countries in the OECD (Organization for Economic Cooperation and Development) in 2015 were in Europe (measured by GDP per hour worked) where vacations are mandatory. The United States ranked sixth.

Statistics show that Luxembourg, where people only work an average of 29 hours per week, is the most productive.  Canada ranks number 18 where workers average 32.8 hours per week.

This is interesting, especially now, when many companies are dropping limits on vacation or time off.  In fact, some organizations are telling employees they can take as much time off for as long as they want ─ but, the work must be done!

Technology and flexible working schedules have redefined how, where, and when we all do our jobs. The belief is if working nine to five, or even coming to the office, is no longer the rule, why not be just as flexible with vacations?

An example is the Virgin Group of companies owned by Richard Branson.  Employees at the Branson’s companies can take unlimited vacation.  “Take a holiday whenever you want − as much you want. We’re not going to keep track of how much time off you take,” he said in a CNN interview.

Staff does not need to ask for prior approval and their managers are not expected to keep track of their days away from the office. It is left to the individual to decide if, and when, they can take an hour, a day, or a week off.  The work just needs be done.

This high-trust culture assumes that employees will only leave if their work is up to date and the team can cover for them on any urgent or unexpected situations. Of course, this also means they may be interrupted by the office while on vacation.

This new working environment dictates that the manager should focus on what people do, not on the hours or days they are physically at the office.

My question for managers:

Does your culture encourage your employees to take their full vacation without fear of judgement?




Joseph Sherren, CSP, HoF,

Global Speaking Fellow

International Business Transformation Specialist.

Please call (902) 437-6998, or check out our website:


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