Business & Economy

Virgin's unlimited vacation policy: Not the dream you'd think?


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Billionaire businessman Richard Branson is telling some of his Virgin Group employees to take as much vacation time as they want.

They don’t have to ask permission first and no one will be keeping track, according to a company announcement, as long as they’re caught up on all projects and “their absence will not in any way damage the business — or, for that matter, their careers."

It may sound like a dream, but Scott Francis, an engineer, says an unlimited vacation policy wasn’t the perk he thought it would be.

“It sounded really cool to me until I started working at a company that had one,” he said. “The two problems that I had were not feeling like I had necessarily earned vacation because it wasn’t accruing, and also feeling like it was going to reflect negatively on me if I took vacation that wasn’t owed to me.”

Now, he’s changed jobs to a position which offers a set amount of vacation time, which he likes better. When his kids had the day off from school recently, he took a vacation day so they could spend it together, encouraged to do so because it would expire in a few months if he didn’t use it.

“It’s sometimes easier to accept something given to you, even if you don’t like it, than to be the one to decide how to extend this time off from work,” says Susan Krauss Whitbourne, a psychology professor at the University of Massachusetts Amherst. She says Americans have a particularly strong work ethic and fear they’ll look lazy if they take too much vacation.

A survey of vacation time by the travel company Expedia found the average American has 14 vacation days, but only uses 10. Meanwhile, the French take all 30 days they’re allotted.

“The U.S. is more of a rat race that way,” says Robert Frank, an economist at Cornell University.

Despite the fact that many companies don’t offer much vacation time, employees feel reluctant to use their entire allotment for fear they’ll seem like slackers.

“You see the same problem in the decision of how long the work week is at very competitive firms,” Frank says. “The investment bankers and the consultants work 65- or 80-hour workweeks, not because there’s that much to do, but because promotion chances are limited and the ones who are seen to be working the hardest are the most likely to get them.”

In terms of building trust between management and workers, a benefit of the unlimited vacation policy can be shifting workplace priorities from time spent at work to the amount of work accomplished, says Lotte Bailyn, an emeritus professor at the MIT Sloan School of Management.

But in practice, “without any guidelines, people are going to be quite nervous,” she says. “And we know in some companies, actually people have not been taking very much.”

One solution might be for management and executives to lead by example, she says, and dash off to Hawaii for a couple of weeks – living the dream.