How to Choose Your Vacation Policy: A Guide to Finding the Perfect Balance

How to Choose Your Vacation Policy: A Guide to Finding the Perfect Balance

by Andrew
September 12, 2023


Planning a vacation is exciting, but choosing the right vacation policy can be equally important. Whether you’re an employee trying to navigate your company’s benefits or a business owner crafting a policy for your team, finding the right balance between work and leisure is crucial. In this blog post, we’ll explore the factors to consider when choosing a vacation policy that suits your needs, whether you’re an employer or an employee.

Understanding Different Vacation Policies

Before we delve into the decision-making process, let’s briefly examine the common types of vacation policies that organizations typically offer:

  1. Traditional Accrual-Based Policy: Employees earn vacation days over time, usually on a per-pay-period basis. The number of days accrued often increases with years of service.
  2. Unlimited Vacation Policy: Some companies offer a more flexible approach, allowing employees to take as much time off as they need, within reason, without accruing specific days.
  3. Paid Time Off (PTO) Bank: PTO combines vacation days, sick leave, and personal days into a single pool of days that employees can use for any purpose.
  4. Use-It-or-Lose-It Policy: In this policy, unused vacation days at the end of the year do not roll over into the next year.

Choosing the Right Vacation Policy as an Employee

  1. Assess Your Needs: Start by understanding your vacation needs. Consider factors such as family commitments, personal preferences, and the frequency of vacations you typically take.
  2. Evaluate Your Company’s Policy: Review your company’s vacation policy and understand the details, including accrual rates, rollover options, and any blackout periods.
  3. Communicate with Your Manager: Open communication is key. Discuss your vacation plans and preferences with your manager to ensure they align with your team’s goals and workload.
  4. Consider Your Work-Life Balance: Evaluate how the vacation policy impacts your work-life balance. Is it flexible enough to accommodate your needs? Does it encourage taking time off to recharge?
  5. Plan Ahead: Plan your vacations in advance, considering the demands of your job and your colleagues’ schedules. This helps minimize disruptions and ensures a smoother transition during your absence.

Choosing the Right Vacation Policy as an Employer

  1. Understand Your Company Culture: Consider the type of work environment you want to cultivate. Does your company value work-life balance and employee well-being?
  2. Analyze Industry Norms: Research what vacation policies are common in your industry. This can help you stay competitive in attracting and retaining talent.
  3. Consider Your Team’s Needs: Understand the unique needs of your team. A policy that suits a creative agency might differ from one for a healthcare facility.
  4. Consult with Employees: Involve your employees in the decision-making process. Collect feedback on their preferences and needs.
  5. Balance Business Objectives: While supporting employee well-being is important, ensure that the policy doesn’t negatively impact business operations. Find a balance that benefits both sides.
  6. Communicate Clearly: Once you’ve established your vacation policy, communicate it clearly to all employees. Provide guidelines on how to request time off and address any questions or concerns.


Choosing the right vacation policy is essential for maintaining a healthy work-life balance, whether you’re an employee or an employer. It should reflect your company’s values, support your employees’ well-being, and consider the unique dynamics of your workplace. By assessing your needs, communicating effectively, and striking a balance between work and leisure, you can create or choose a vacation policy that allows everyone to enjoy their well-deserved time off while contributing to the success of the organization. Remember, the right vacation policy can be a win-win for both employees and employers.

Regardless of your decision as a small company Planleave has you covered. First, you can try our ROI Calculator to see the benefits of replacing spreadsheets and then you can sign up for a free trial at

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