Right now, it’s the middle of August, meaning that many of us are in the midst of a hectic, whirlwind, all-too-short summer vacation. For many of us, this August sojourn is our only opportunity all year to unplug and refresh, but why does it feel so hectic?

Vacation policies are set up by companies as a “perk”, but they’re often done with the sword of Damocles hanging over employees’ heads. Counting days, making trade-offs between weddings, showers, anniversaries, and bumper days around holidays makes it impossible to truly find uninterrupted time to recharge batteries.

Of course, vacation days accrued are not just frustrating for employees, they’re a legitimate business liability for employers. Vacation days are compensation, and in many states, they have to be paid out in cash if an employee leaves without using them. That’s why many companies limit vacation days per year, and only increase them with tenure – longer-tenured employees are less likely to leave at any given point, so the cash exposure of pay out feels less immediate.

Some employers have tried to solve this problem with unlimited vacation – at first glance, it seems like a classic win/win: no counting of days for the employee, no accruing liability for the employer. However, in practice, it turns out that many employees feel pressure not to take as many days as they would have under the traditional “exploding” vacation day policy. While some organizations, such as Netflix, have an admirable leadership-driven culture of taking all the vacation you need – most can’t pull it off.

So what to do?

I propose that all organizations take a page from the Federal Deposit Insurance Corporation. Wait, you ask – the FDIC that has stickers on my bank’s doors? Yes, that very same.

My proposal is to institute both an unlimited vacation policy, but also institute a mandatory two-consecutive-week vacation every calendar year where you turn off their access to email, Slack, and all other corporate tools.  Call it a mini-sabbatical, if you will.

Well, it turns out that the FDIC strongly encourages banks to have a vacation policy where senior officers and directors take a two-consecutive-week vacation where they have no responsibilities, and others at the bank pick them up: https://www.fdic.gov/news/news/financial/1995/fil9552.html

For the FDIC, this annual long vacation is meant as a risk management technique. Literally, it’s hard to embezzle from the bank if you’re gone for two weeks.  But you shouldn’t institute a similar mandatory vacation because you don’t trust your employees – you should do it to invest in them and strengthen your organization.

Extending this two-week vacation to all employees – especially for companies with “unlimited vacation” – neatly solves a lot of problems:

  • everyone takes a vacation sizeable enough to fully recharge, no matter how they vacation
  • the company doesn’t increase any vacation liability
  • it ensures that everyone is cross-trained, because people anticipate key folks being unavailable
  • folks document what they do and how they do it, so knowledge isn’t locked in silos
  • it allows junior employees opportunities to get “game reps” before they are promoted

Many people only get an opportunity to take two consecutive weeks of vacation for their honeymoon – but it shouldn’t be a once-in-a-lifetime treat.  Unlimited vacation with a two-week mini sabbatical is great for employees, employers, and business continuity.