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Flexible Vacation Policies: What's the Catch?

 
Lauren Covello
FOXBusiness
     

    Imagine booking your dream vacation without having to worry about using too many vacation days.

    No doubt this is wishful thinking for most Americans. But some big-name companies are beginning to offer flexible vacation packages and work-life programs designed to give their employees exactly that sort of freedom. And the payback for employers is no illusion.

    Travel is On Topic at FOXBusiness.com in April. From tips on booking cheap vacations to flying with your pets, we explore your top travel ideas. Check back throughout the month to find out what you need to know.

    While it can be argued that wireless devices like BlackBerrys and laptops have created a society of workaholics, these devices have also produced a more mobile culture -- one that thrives on flexibility. This shift in demand is the driving factor in the adoption of more progressive vacation policies, said Joe Robinson, a work-life balance coach and author of Work to Live: The Guide to Getting a Life.

    “The work-til-you-drop brigade is retiring,” he said. “Generation Y workers don’t buy that ethic of all work, no life.”

    Johnson & Johnson (JNJ), Best Buy (BBY) and Genentech (DNA) have introduced innovative work-life plans that have received lots of attention. (Genentech, for instance, offers six-week paid sabbaticals to every employee with six years of service.) J. Crew (JCG), while less public about the details of its policies, offers a benefits program that gives employees more paid time off than most -- especially in the retail industry.

    Yet, despite increasing demand for flexibility, many employers are reluctant to break old habits. Why? According to Robinson, many still falsely believe productivity can be gauged by quantity (or hours worked) rather than the quality of those hours. Studies have shown the opposite is true: Taking time off is crucial to maintaining a healthy and productive workplace.

    Still, in an uncertain economic climate where every dollar counts, Robinson warns a number of companies are beginning to treat vacation plans like pension plans -- and eliminating them altogether.

    But that’s not necessarily a bad thing if you ask Netflix (NFLX) employees. The online movie retailer has no formal vacation plan in place: its more than 400 salaried employees are allowed to take off as much as they want, so long as the quality of their work isn’t compromised. The company doesn’t track vacation and therefore doesn’t compensate for days taken or not taken.

    Sound crazy? It appears to be working.

    “So far, it’s been nothing but terrific,” said Steve Swasey, the company’s vice president of corporate communications. Swasey attributes the success of the informal vacation policy to the integrity of the company’s employees, and believes allowing them to take time off at their choosing and even work from home has helped the company’s profitability.

    “Whose best work is done under the pressure of the clock? Your best work is done when your mind is at peace and relaxed,” he said.

    While there are no set rules about giving notice for an absence, employees usually discuss their schedules with their supervisor and coworkers. Some employees won’t take a vacation for two years, but then take a six, seven, or eight-week vacation every three years, Swasey said.

    Which brings to light one of the risks in enacting a frameless vacation policy, said George Faulkner, principal in the absence management consulting group at Mercer, an HR and financial services firm. While Faulkner generally supports programs that offer flexibility, he warns that with no pressure to "use 'em or lose 'em", some employees may be inclined to work through the year without taking any time off.

    Peer pressure may also be a factor. “If you take time off, you may feel kind of guilty about letting others down and shifting burdens on them,” Faulkner said.

    IBM (IBM) is probably one of the largest companies to have a flexible work-life system in place. Of its 383,000 employees in 170 countries, 42% of them don’t regularly appear in an IBM office -- they’re either working from home, traveling, or at a customer’s premises, according to Ron Glover, vice president of the company’s diversity and workforce programs.

    The company recognized a long time ago that its global presence and the nature of its business meant giving its employees more flexibility. U.S. IBM employees often have to account for time differences when communicating with Europe and Asia, and thus could theoretically work 365 days a year, Glover said.

    Workers are given a set number of weeks of vacation (three weeks in the U.S., but it varies by country and accrues with years of service), but the company doesn’t ask them to strictly report their days off.

    “I’ve had people on intense projects,” said Glover. “I may go to people on that team and say ‘Don’t show up tomorrow. Take the day off.’”

    The company encourages people to use their vacation because it doesn’t allow end-of-year rollovers.

    IBM runs an internal survey every two years to determine whether its programs are working and what can be improved. The most recent survey showed employees’ ability to integrate work and personal life is improving. And Glover said the company is looking for even more ways to create a healthier, happier workforce.

    So if IBM can do it, can anyone? That depends. Glover attributes IBM’s work-life success to its corporate culture and infrastructure, arguing that it takes special skills to be able to motivate people when everyone’s working from a remote location. If a company -- large or small -- doesn’t have the resources it may not be suited for this type of environment.

    Industry is another factor to consider. Faulkner at Mercer said service-related industries like health care, finance and software companies are more likely to test these types of programs; manufacturing jobs, less likely due to the hands-on nature of the business.

    While only a few companies have fully integrated flex programs, Faulkner believes the underlying concept -- quality over quantity -- will catch on with other companies.

    “I do think that [the idea] is going to grow,” Faulkner said.

     
     

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