Given the growing emphasis on freedom and flexibility within the workplace, more employers are seeing an increasing number of vacation requests from their staff. While the satisfaction and happiness of your workforce is important, it’s equally important that you maintain some amount of versatility as their employer while preserving acceptable levels of productivity.

Although it may sound counterintuitive at first, some employers are actually offering their staff unlimited vacation time as a means of achieving greater work-life balance. Others have simply increased the amount of vacation time that is available to their workers.

Understanding Discretionary Time Off Plans

Commonly referred to as a “Discretionary Time Off” plan, or DTO, this strategy gives individual employees greater control over their time off. While most employees who benefit from DTOs will still have to coordinate  vacation time with their managers or supervisors, sometimes they are free to schedule as much DTO time as they wish (while  completing their job duties).

The team with LinkedIn is one of the latest company rosters to benefit from a DTO plan. Other companies with similar plans include Netflix, Virgin Group and Hubspot, as well as ZestFinance, who has always provided their employees with unlimited vacation time.

Douglas Merrill, ZestFinance’s founder and current CEO, spoke about the balance a company needs to maintain when providing their employees with unlimited vacation time. “If we were to track it, in some sense, we’d be sending a message that, ‘Oh, hey, it really isn’t unlimited. We really don’t want you to take all that.”

Pat Wadors, a leading HR executive with LinkedIn, explained their new stance in a recent blog post, “It’s part of a growing movement to place more focus on results and empowerment, not hours worked… And it’s an important step to help employees recharge and keep engaged.”

Common Benefits

Apart from the obvious benefit to the employee, DTOs such as the one recently introduced by LinkedIn, provide many great benefits for the company. While an attractive vacation policy can help boost employee retention and lower turnover, these plans are also expected to recoup some of the expenses that would be lost to unused vacation time.

In fact, according to a recent CNN report, LinkedIn lost more than $128 million to “accrued vacation and other employee-related expenses” in June 2015. Furthermore, a report by Project: Time Off, entitled “Hidden Costs of Unused Leave,” states that U.S. businesses spend nearly $225 billion on unused vacation time.

Impact on Productivity

Although one might be tempted to cite a lack of productivity as an argument against such DTOs, recent studies by Today suggest that most U.S. workers only use 51 percent of their allocated vacation time. With this in mind, many experts view this new trend as having little to no negative impact on the company productivity.

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