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The rise of endless vacation

JUANA SUMMERS, HOST:

With summer drawing to an end, workers across the country are eyeing their dwindling paid leave balances. Some people, though, don't have to worry about that - those working for companies offering unlimited paid time off. Here to investigate this growing company perk are Darian Woods and Wailin Wong from The Indicator From Planet Money.

DARIAN WOODS, BYLINE: Meredith Simmons is a marketing specialist, and one of her first jobs out of college was selling phones and laptops. With no paid time off, she had to squeeze in any trips pretty tightly.

MEREDITH SIMMONS: I wanted to go to Disneyland with one of my coworkers, and it took weeks for them to build a schedule so we could go. They were closed on Sundays, so we set it up so we had a half day on a Saturday. We could drive down to Anaheim, which was, like, a four-hour drive, go to Disneyland, spend the night and then be back before we'd have to work Monday morning.

WAILIN WONG, BYLINE: So when Meredith applied for another job, she was excited to hear it not only had paid time off. It had unlimited paid time off.

SIMMONS: Which was like, oh, this is great. I'll take, you know, the time that I need and can adjust my work - like, you know, kind of like being treated like a grown-up.

WOODS: Now, obviously, unlimited pay time off is never truly unlimited. Otherwise, what is the company paying you for? But you would expect it translates into generous helpings of vacation time. Meredith joined the company with this in mind. She started as a remote worker.

WONG: Later, the company asked her to relocate to its Indiana office. She took a few days off for the drive.

SIMMONS: My manager actually called me in the middle of the drive, saying, hey, we need you to join a meeting right now, even though I was only off for five or six days.

WONG: And maybe it's OK as a one-off, but it was foreshadowing what was to come. What Meredith thinks was part of the problem here was that there wasn't a formalized system of requesting or tracking paid time off, or PTO. People didn't know who of their colleagues were off work. The company culture was ambiguous when it came to vacation, to say the least. The entire time she was there, which was a year and a half, she felt comfortable enough to take just six days off, and she did need more.

SIMMONS: My mother-in-law actually passed away. And I didn't feel comfortable, despite the fact having unlimited PTO, to actually take time off. And so I was being reached out to from, you know, the day that we were doing the funeral, the day that she passed away. That's actually what made me think about leaving that company, and I did six months later because it was just, like, I'm not getting what I need to take care of myself.

WOODS: Meredith's experience with this supposed perk is borne out in the data. Jin Yan is a senior economist at Revelio Labs, and Jin compared companies' reviews on online workplace review websites like Glassdoor and Fishbowl.

JIN YAN: We do see that the ratings are lower for companies with unlimited PTO policies.

WONG: Now, the companies that are more likely to have unlimited paid time off are tech companies, which might have their own peculiarities. So in this analysis, Jin was comparing like with like. She was comparing companies with their competitors in the same industries, you know, marketing or architecture.

WOODS: Ironically, when you drill down, the category these companies did worst was work-life balance. It was 2.5% lower.

WONG: And it seems like potential applicants are cottoning on to the idea that unlimited paid time off might still mean a lot of pressure to work. Look online, and there's a lot of talk saying that unlimited paid time off is a scam. With unlimited paid time off, employers often aren't obliged to pay out unused vacation balances when an employee leaves. So the policy often saves a company money at the expense of the employee.

WOODS: And maybe as a consequence, Jin's analysis finds that job postings with unlimited paid time off take an average of about 12 days longer to fill.

YAN: I think it kind of indicates that there is this negative view on unlimited PTO that made job seekers wary about these postings. They don't know what they're going into. They don't know if there's a clear guidance on this, and they're trying to avoid it.

WONG: That was Meredith's thinking when she applied for a new job at a tech company. Their pitch - unlimited time off - hooray.

WOODS: Nice. I mean, I imagine she's a bit cynical by this point.

WONG: (Laughter).

SIMMONS: In the interview, I'm like, OK, this is going to be the same movie. I know the ending.

WOODS: But in a twist worthy of an M. Night Shyamalan movie, this company was different.

SIMMONS: When I get the offer for the call - call for the offer, they say, we want you to start this date because we want to have enough onboarding time because your manager is going to be on a trip for a couple of weeks, and we want to make sure you have time to ask them questions before they go because they won't be available. And I was thinking to myself, wait, is this real that the recruiter knows that the person that's going to be my manager is going on this vacation? I start the job, and the manager does go on vacation. She's gone for three weeks and was truly offline. I was like, OK, this is legitimate. This is great.

WONG: Green flags everywhere - a system tracking leave, senior people being role models and taking time off and no weird, like, hybrid vacation where you're getting sand in your laptop keyboard.

WOODS: The worst.

WONG: Totally - worse than crumbs. Meredith had the confidence to take some time off - Yellowstone, a Mediterranean cruise. And she took time off to judge baked goods for a youth event.

SIMMONS: It is a whole-day event, and the kids really look forward to it.

WOODS: What a gig (laughter).

SIMMONS: Yeah. I get paid, like, 50 bucks for it, but it's fun.

WOODS: So unlimited paid time off was actually now working for Meredith when it was supported by solid systems and a workplace culture that encouraged time off, which might be why there are some bright spots.

WONG: While the policy is still rare, between the mid-2010s and today, unlimited paid time off grew tenfold. At the jobs review website Glassdoor, people review places they have worked. And for each workplace, you can write a pros list and a cons list. And 86% of the time, unlimited paid time off is listed in the pros column as a positive thing. Also, unlimited paid time off programs tend to rate higher than limited ones. Jin Yan the economist says it's a mixed picture.

YAN: The people that like it and like how it was implemented in the company really like the policy itself.

WOODS: So it's those other people and those other times when the policy doesn't work out that it can go really bad. So Jin Yan and her colleagues want to encourage practices that make unlimited paid time off work for everybody.

YAN: We're just trying to encourage employers to look for better examples in terms of how to implement this policy in their workplace.

WONG: So from the stories of Meredith, Jin and other people we spoke to, we've kind of discovered that unlimited paid time off doesn't really mean that much on its own. What matters for whether you're really going to get time off to reset is about the systems and culture of a workplace. But, you know, how do you figure that out when applying for a job? Like, how do you practically do it? Meredith has some advice.

SIMMONS: What I've told people to ask is ask every person in an interview, what was the last vacation you took, and how long were you gone? If they don't have a good answer, it's a pretty good sign people don't take it. If they don't light up about where they went, it was probably a stressful experience. And if they don't have an answer at all, run away.

WONG: Run away.

WOODS: Run away.

(LAUGHTER)

WOODS: Meredith knows well.

WONG: Just Kool-Aid Man right through the wall at the end of the interview.

WOODS: Yeah.

WONG: And be like, bye.

WOODS: This interview is over. Was it something I said?

(SOUNDBITE OF THE FLIPSIDE AND SKRN'S "TULIPS")

SUMMERS: That was NPR's Wailin Wong and Darian Woods from The Indicator From Planet Money podcast.

(SOUNDBITE OF THE FLIPSIDE AND SKRN'S "TULIPS") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Wailin Wong
Wailin Wong is a long-time business and economics journalist who's reported from a Chilean mountaintop, an embalming fluid factory and lots of places in between. She is a host of The Indicator from Planet Money. Previously, she launched and co-hosted two branded podcasts for a software company and covered tech and startups for the Chicago Tribune. Wailin started her career as a correspondent for Dow Jones Newswires in Buenos Aires. In her spare time, she plays violin in one of the oldest community orchestras in the U.S.
Darian Woods is a reporter and producer for The Indicator from Planet Money. He blends economics, journalism, and an ear for audio to tell stories that explain the global economy. He's reported on the time the world got together and solved a climate crisis, vaccine intellectual property explained through cake baking, and how Kit Kat bars reveal hidden economic forces.