The Company That Pays Employees $2K to Go on Vacation

October 4, 2016

KanasphotoWith the fall semester now in full swing, the easygoing feeling of summer vacation is becoming an increasingly distant memory. Then again, that’s only for the lucky Americans who actually get to take a vacation during the warm months of the year. For the rest, either they don’t receive adequate time off or simply refuse to take advantage of it. In fact, as much as 55 percent of American workers don’t use all of their paid vacation days out of fear that they’ll be seen as less hardworking than their peers.

This culture of overcommitment wasn’t acceptable to Mark Douglas, CEO of the marketing and advertising firm SteelHouse. In his eyes, dedication to a job shouldn’t also prevent someone from living a fulfilling life. So when in 2010 he offered unlimited vacation time to all his employees, he figured the news would be greeted with excitement. Instead, staffers were unsure about his intentions. “If you have a caged lion that was born in captivity, and then you open the cage, they back up more into the cage. They don’t start running free,” said Douglas. “When we first started telling people they had unlimited vacation, they didn’t even know how to interpret that.”

Douglas decided to soothe his employees’ fears by taking his policy a step further. Not only would SteelHouse staffers receive unlimited time off, but they’d also be given $2,000 per year to spend on the trip of their choice. “It’s one thing to say ‘You have three weeks vacation,’ like most companies do,” said Douglas. “It’s another thing to say ‘You have cash, and if you don’t go on vacation and spend this money, the money literally goes to waste.’ It’s another level of saying this is real.” In order to maintain confidence in the system, SteelHouse is always quick to reimburse staff for vacation expenses. That means that an employee who purchased a plane ticket on Monday will be reimbursed by Tuesday. Douglas says this ensures that trust goes both ways: if the company takes care of you, you’ll be sure to take care of the company by doing a good job. As a result, not too many people quit SteelHouse. Out of a staff of 250, only five employees have left the company in the last three years. “We have virtually zero turnover,” said Douglas, who adds that employees returning from vacation often come back more productive than ever.  

Questions:

 

  1. Should more companies institute vacation policies similar to the one at SteelHouse? What might prevent them from doing so?
  2. Why are so many American employees afraid of taking time off work, even when they have vacation days available?

    Source: Chris Weller, “A CEO Who Gives His Employees $2,000 to Go on Vacation Says People Are More Productive Than Ever,” Business Insider, September 26, 2016; Quentin Fortrell, “55% of American Workers Don’t Take All Their Paid Vacation,” MarketWatch, June 19, 2016. Photo by Kansasphoto.

Leave a Reply