10/16/2012 10:55 am ET Updated Dec 06, 2017

Should Startups Offer Employees Paid Vacation Time Off?

Some companies are paying people to take vacations (or offering unlimited vacation time). Would you do this in your business? Why or why not?

The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

A. Don't Create Entitlements

2012-10-16-ChristopherKelly.jpgLifestyle companies looking to implement liberal vacation policies should do so with some caution in order to mitigate their legal risks. The word "unlimited" invites trouble. Research "return on work" environments where generous vacation allotment is contingent upon job performance. This type of implementation ensures that time off is perceived as a reward and not an entitlement.
- Christopher Kelly, NYC Conference Centers

A. Quality vs. Quantity of Hours

2012-10-16-AngelaPan.jpgA lot of business now are virtual. It isn't about where you are in the world, it's ab out your commitment to your business. I believe it isn't the amount of time you spend on a project, it's about the quality of your work. If an employee feels as if they are more productive at home or somewhere else, by all means. Just get the work done.
- Angela Pan, Angela B. Pan Photography

A. Who's on Your Tearm?

2012-10-16-TravisSteffen.jpgIf you've got a team full of intelligent, self-motivated people working for you who truly enjoy doing what they do and achieving milestones, this can be a great strategy. If, however, you have a team made up of trained monkeys (or their human equivalent), your productivity will plummet.
- Travis Steffen, WorkoutBOX

A. Structure Is Still Needed

2012-10-16-AlexandraLevit2.jpgI wouldn't give people unlimited vacation time because it opens up a can of worms. Some people will take advantage of it more than others, which will cause resentment among the staff. I also wouldn't pay people to take vacation. I think that most mature, sensible employees can manage a few days off at their discretion. If they can't, then there's a bigger problem that needs to be addressed.
- Alexandra Levit, Inspiration at Work

A. Trust Your Team

2012-10-16-HeatherHuhman.jpgWe currently offer unlimited vacation time at my company. Since everyone works remotely, they're able to do their work whenever is most convenient for them. As long as their work is completed, they're able to take vacation days throughout the year - or work from wherever their travels take them.
- Heather Huhman, Come Recommended

A. It's a Terrible Idea

2012-10-16-JasonEvanish.jpgStartups are filled with hard workers that love what they do. Because of that, they're prone to workaholism and burnout. By having unlimited vacation, you open up major problems. Bad employees will take too much time off, causing major culture/team issues. And good employees won't take any time off -- infinity and zero can be difficult to differentiate in the mind, and pressure says to take none.
- Jason Evanish, Greenhorn Connect

A. Value Created, Not Hours Worked

2012-10-16-junloayza.jpgI build startups, not corporations. I therefore prefer to have no office space and a virtual team all over th e country, and base performance on value-created, not hours-worked. My team understands they can take breaks or vacations whenever they want to, as long as they complete their objectives. It's a challenge to hold people accountable only if they're the wrong people.
- Jun Loayza, Lion Step Media

A. If I Had the Money, Heck Yeah

2012-10-16-DerekFlanzraich.jpgI'm a big believer that rest and recovery, both mental and physical, makes for team members that aren't just more happy, but also more creative and more efficient, too. Emphasizing and even incentivizing people to go on vacation, where they can really escape and re-group from crazy startup l ife, will only pay back in dividends.
- Derek Flanzraich, Greatist

A. Try Employee Volunteerism

2012-10-16-JasonJannati.jpgWorking for a startup employees often work around the clock and at times can need more work. While our business was developing, some employees found they didn't have enough full-time work. In order to provide them with a consistent full-time salary, we decided to pay them to volunteer to make up for the missing hours. Supporting paid volunteer hours has built morale and developed a cool culture.
- Jason Jannati, greeNEWit

A. Vacations Demonstrates Responsibility

2012-10-16-StephanieKaplan.jpgAt Her Campus, we don't have a set number of vacation days for employees per year. Everyone is expected to work their hardest and do their best possible job at their job, and we leave it up to them how much vacation time they want to take. This way, employees feel control over their own schedules and recognize that they are valued by the results of their work rather than by the hours put in.
- Stephanie Kaplan, Her Campus Media

A. Balance Is Key

2012-10-16-SusanStrayer.jpgIt's a great model if you balance it with performance measures and guidelines. Employees have to be accountable to perform and should be rewarded when they work hard to get things done quickly. If it's all about performance, they'll hold each other accountable, both on taking too much vacation and on not taking enough.
- Susan Strayer LaMotte, Exaqueo

A. Potentially a Disaster

2012-10-16-LukeBurgis.jpgZappos pays certain people to leave after finishing their training program. This makes sense . Paying people to take vacation time does not. Businesses pay for productivity, not for vacations. In the short run, employing this type of policy may be good for publicity and promoting a cool company culture, but it's a disaster in the long run. A great culture can co-exist with structure.
- Luke Burgis, ActivPrayer

A. It Means More Productivity

2012-10-16-BhavinParikh.jpgWe do offer unlimited vacations. We want to foster a culture of trust and responsibility. The more flexibility you give employees, the more responsible they feel. Instead of counting hours or vacation time accrued, they work hard and stay late when they need to and then ta ke a break to recharge when they need to. The company and the employee both benefit.
- Bhavin Parikh, Magoosh Test Prep

A. Try Flex Time Instead

2012-10-16-ElizabethSaunders.jpgI think vacation time is incredibly important, but even more so, flexible time. If you allow the people working for you to do what's important to them, such as attending a family event, going to the doctor, surfing, or taking a class, and then make up the hours at other times, they don't typically need unlimited vacation.
- Elizabeth Saunders, Real Life E®

A. Happy Life Means Happy Employees

2012-10-16-AbbyRoss.jpgWork-life balance is increasingly important in today's fast-paced environment. I believe that travel and taking time off are essential to make sure that employees are happy and focused at work.
- Abby Ross, Blueye Creative