In an effort to retain the best talent, a new human resources policy has emerged among technology companies: unlimited vacation time. Companies like Evernote, Best Buy, the Motley Fool, Netflix, Zynga, Gilt Groupe, Chegg, TIBCO Software, Bluewolf, NerdWallet, WeddingWire, among others, have adopted this policy. Evernote even takes a step further and pays $1,000 to those employees who actually take a vacation during their time-off and produce an airline ticket as evidence. Companies are correct in believing that a well-rested employee is a happier and a more productive one. The latest theory behind the unlimited vacation policy is the Results-Only Work Environment (ROWE), where employees are judged based on their performance and not based on the number of hours they spend in the office. However, only 1% of the U.S. companies have formally adopted the ROWE, according to a research report of the Society forHuman Resource Management. So far, little or no complaints have been voiced by the companies with unlimited vacation plans regarding the abuse of vacation time by the employees. In fact, employees at these companies tend to take less rather than more vacation time.
So, why do these companies choose to adopt the ROWE? Mainly, to retain top talent, as the lack of experts (especially in the technology sector) becomes apparent. Currently, the unemployment rate for those in the technology field (4.4% in the Q1 of 2012) is about one half of that of the general population (8.3%). In 2011, McKinsey & Co. published areport on the big data market, where it predicted that “The United States alone faces a shortage of 140,000 to 190,000 people with analytical expertise and 1.5 million managers and analysts with the skills to understand and make decisions based on the analysis of big data.” According to an April survey from GigaOm, 45% of business intelligence projects fail due to a lack of data expertise on staff.
The technology sector is rapidly expanding and this expansion dictates new rules. Human resource specialists and management should stay informed of the trends and be willing to adopt quickly in order for the companies to stay competitive and be able to retain the best qualified personnel. In a world where personal time is ever more precious, unlimited vacation may be just the right incentive for top engineers, data scientists and other technology specialists to switch over to the companies that have adopted the ROWE.
This article is not a legal advice, and was written for general informational purposes only. If you have questions or comments about the article or are interested in learning more about this topic, feel free to contact its author, Arina Shulga. Ms. Shulga is the founder of Shulga Law Firm, P.C., a New York-based boutique law firm specializing in advising individual and corporate clients on aspects of business, corporate, securities, and intellectual property law.