Iteration Matters, Even in How To Create a Vacation Policy

At Steadfast, every one of our employees has been an integral part of a high-growth startup. The founder mindset is in our company DNA. 

As self-motivated tech professionals, we gravitated toward the flexibility of an unlimited vacation policy. While it sounds great in theory, studies show employees actually take less time off when vacation is “unlimited.” 

One of our core values is to create something different from the standard agency or startup: we want to be different in how we approach work/life balance for the sake of our employees’ and our own mental health, including time off. 

Vacation, like benefits, is a way to show employees that we care. Culture isn’t just happy hours and ping pong tables, but must include benefits, vacation, parental and sick leave, etc. This is what really shows the true colors of leadership and the core of who we are as a company -- and how we value and respect our employees. 

So, as we grew, we sought out to create a vacation policy that not only held our employees accountable, but ourselves (read: me) accountable to taking time off.  

To make it simple, our vacation policy can be best summarized using the acronym VACA.

Value: We value time off and strongly encourage no Slack / laptops on days off. 

Abundance: We start off the year with an abundance of set vacation days. For us, it’s 22 days a year. 

Cash: We offer a small cash bonus to everyone who takes at least 2 vacation days a quarter at the end of the year. 

Accountability: We hold our employees and ourselves accountable to taking vacation. We make an effort to bring it up at least every month in All Hands and in quarterly reviews. 

With this in mind, here’s how our policies have evolved through the years: 

Vacation Policy V1: Unlimited Vacation

In version 1, we gave employees unlimited vacation. While we had a minimum, it wasn’t strictly enforced.

This is when we were at about 3 employees. We used a shared Google Calendar for vacation days and encouraged at least 3 days off each quarter.

This felt like the equivalent of Yoshi Valley on Mario Kart: fun at first, but not sustainable. 

As we grew, we noticed employees weren’t taking as many vacation days. We moved on to:

Vacation Policy V2: Unlimited with more Intention

In version 2, we kept the unlimited vacation and the minimum, but took more time to try to enforce time off through encouragement during quarterly reviews and 1:1s. Even so, the policy was very difficult to “enforce” in practice.  

We had our best intentions, but it still left a lot of room for interpretation. When an employee has unlimited vacation, the internal questions are still very much present: “How much time off is too much? Can I get my work done? Should I really be relaxing when I can do more?” 

At one point during Covid lockdown, our team was working longer hours and no one was taking time off. I encouraged everyone to take a day to themselves. It didn’t happen. I knew this wasn’t sustainable, so I made our company close for two days.  I also added a vacation tracker software that integrated into Slack, Aptly named Vacation Tracker. 

It was clear our people weren’t taking enough days off, and burnout was becoming an issue, especially in the new realm of working strictly from home.  

We needed to iterate again, which led us to:

Vacation Policy V3: Available vacation days with incentives to take off 2-3 days a quarter.

In response, we crafted our current policy: 22 vacation days with a cash incentive if an employee takes at least 2-3 days off a quarter. If they take the encouraged time, they receive a bonus at the end of the year. If they choose not to take the time, $50 is deducted from the bonus for each quarter they do not take at least 2 days of time off.  

This has worked well thus far; we’re held accountable for time off, and it provides a proactive approach to burnout rather than a reactive one.

I’m sure this will evolve as our company continues to grow, but it’s working for us now. 

The key for us is to consistently look at what’s working (I’m a big fan of anonymous Google Forms for employee feedback) and what isn’t. If we need to evolve, we can change course quickly to a policy that does work that we build together. At the end of the day, that’s what matters: building something together that we’re proud of.

-Elise Graham Kennedy