I found the article Give Your Employees Unlimited Vacation Days | Inc.com. interesting, as I have had this discussion with people in the past. While I pretty much agree with what is said in the post, I have a few things I would like to say (as I do about almost everything!), and a couple of counterpoints.
Going back a bit, vacation time has never been something I looked at closely when I was younger, as I hardly ever took vacation. Through the 90s, I think I went 5 or 6 years without ever taking more than a day or two of vacation. In fact, back in 1999 when I joined Whitehill Technologies, I never even thought to discuss vacation when we were negotiating the employment agreement. Some time after I started, I thought to ask my boss (the CTO) about it, and he said “Fred, you have as much vacation as you can find time to take!”. Note, it turns out I took no vacation in the first few years!
I believe vacation time is important, though. Even when I was not taking vacation, and running myself into the ground, I believed it was part of my responsibility as a leader to ensure members of my team took their vacation time. This all stems from my belief that is a leader’s job to ensure their team stays healthy for the long haul. If you burn your team out during the first few games of the season, you will have nothing left for the playoffs. You have to protect your team, keep them healthy, protect them from the demands of the business, and in many cases (especially with young developer-types who think they are super-human) protect them from themselves.
This is one of the problems I see with the “unlimited vacation days” model, which is often phrased as “take as much or as little vacation as you want”. Unless it is implemented very carefully, and managed by people who truly look out for their teams, there is a great risk of people not taking vacation and burning themselves out – not a good scenario for the staff or the business.
The second issue I have with the “unlimited vacation days” model is that people may feel pressured to take fewer vacation days as they feel they will be viewed poorly for taking time off. This is especially true in a business where you are judged based (wholly or partly) on billable hours realization. There is pressure (real or perceived, implicit or explicit) to not take vacation in order to exceed your target – and you are frequently rewarded and cheered for doing so. Again, this is something that must be carefully managed if you want to ensure your employees maintain life balance. While this is a problem already with “defined vacation allowances”, since many people in North America already do not take the vacation allotted to them (see, for example, here). I think there is risk of the situation becoming much worse if the amount of vacation time is undefined, especially for more junior staff.
Overall, I think it is a great idea, for the reasons stated in the article. But it is not without risk, and needs to be managed, like anything else.