Back to blog home

We moved to an unlimited vacation policy and the surprising results

startup journey business tips

Aircraft vacation

So we moved to becoming a fully remote team, the why and the how of which you can read here.

Around the same time we were thinking of moving to an unlimited vacation policy. The spark for this was that we wanted to make everything simpler avoiding problems we were running into with our existing limited vacation policy and also to make ourselves more attractive to potential new hires as well.

But we were nervous so we did a lot of back and forth discussions over it. How exactly would it work, and what would the consequences be to our team’s performance and productivity.

Use it or lose it hurt us

We have a team of hard workers, we’re lucky but because we had a limited allowance for annual leave what typically ended up happening is that around the end of the year the guys would suddenly go “Oh wait, I have all this vacation time I haven’t taken I need to take it now”. That’s not so great for us as you have a stampede out the door and all of sudden we’ve got a lower capacity to do work.

The unlimited vacation policy from the point of the view of the company would alleviate this, there is no use it or lose it so it would encourage people not do that. Or so that was the thinking.


The obvious concern is abuse, it’s going to be a free for all but that wasn’t really an issue for us because we’ve got a good team of people who are considerate and responsible. We’re very lucky but we wanted to put in a structure to ensure as we grow it won’t be liable to abuse either.

It was a few basic rules like you must give at least two weeks notice on taking leave, and try to avoid being off at the same time as another dev because we’re a small team that’s critical but it also again encourages people to spread the time off throughout the year. And, also it spreads the workload evenly between people rather than unfairly dumping it all on a few people.

But let’s say it isn’t abused but people do take a little more time off, how would it affect productivity? The assumption would be they’re not here so they’re not working and they’re going to be out of the loop so more than likely producivity might take a hit but the research suggests otherwise:

Productivity vs hours worked

Other studies have shown that for every additional 10 hours of vacation time their employees took, their year end performance ratings from supervisors improved by 8 percent.

It sort of makes sense, imagine being completely overworked, over stressed and basically mentally fried. You’re not going to be firing on all cylinders. So it makes sense to set the conditions for a happier and healthier team with better retention of staff.

The effect on our team

What became apparent was that because we had an unlimited vacation policy, and there was no use it or lose it incentive so some people were less inclined to take time off at first. Interestingly, it wasn’t regular team members but senior management and the worst culprit our founder.

It could have been a function of the people we have in our company or it could’ve been a more general rule of thumb about how people behave.

You don’t want to look like a slacker or doing less than others. In hindsight stuff like this seems obvious but it’s like dealing with bugs in code often times you won’t ever have considered it until you run into it, what had to happen is that the MD and others in more senior roles had to lead by example and take time off thus making it OK in a way.

It was always OK but sometimes you need to see it to believe it. And its not easy our founder Phil is a workaholic, we have to remind him to disconnect from everything when he’s off. That’s the kind of place we are where we have to tell people to just check out when they’re on vacation and we’ll man the fort whilst they’re gone.

It’s about creating a culture of people not feeling judged for taking time off or in our case just getting some workaholics (Phil) to remember to take time off.

So far in the year that we’ve had the unlimited vacation policy we’ve had no more discussions about the vacation policy. It works well for us, and we’re still getting work done. In fact we’ve never been more productive producing new features in RealtimeCRM and pushing forward projects at a faster rate than before. The average time off per person has gone up and it’s fine.

It does require discipline and proper planning to make it work, we’ve had devs take off three straight weeks (He’s French) and we’ll be facing a new but interesting challenge where one of our developers will be travelling the world and working at the same time. From our point of view nothing will change except time zones, all it takes is planning work around that like moving weekly catchup meetings so we’re online at the same time for example. It also requires encouraging those who are less inclined to take off time to do so as well so you ensure everyone crosses a minimum threshold.

Of course an unlimited vacation policy might seem pretty radical to you, it’s just something that those weirdos in the tech space do. But that doesn’t mean you can’t be more proactive to ensure your people take some time off, in the long run it’ll help your business and it’s better to sort out a system that works with your business earlier on when you’re smaller and more nimble than when you’re bigger and experimentation is harder to do.

Try RealtimeCRM free for 30 days