You’re working for Netflix! The high-powered streaming platform is one
of the biggest entertainment companies in the world, and they’ve decided they want
you on their team as a salaried worker. And with that comes a lot of benefits. You’ll be paid well - the lowest-paid Netflix
salaried worker gets over $50,000 a year, with the highest paid getting over $600,000. And no matter which side of that fence you’re
on, you’ll get a nice package of perks. It includes stock options, a stipend for any
health needs, unlimited parental leave, and unlimited paid vacation. Wait, did you say UNLIMITED paid vacation? Technically, yes! And on the surface, it sounds like Netflix
just gave you the license to check out on your second day of work, head to the Bahamas,
and collect a paycheck while soaking up the sun. Netflix is a high-tech company, and you can
probably do much of your job from your beach cabana. You’ll even answer some emails - it’s
the least you can do. But you can stay on salary while taking all
the time off you want. It sounds too good to be true. And of course, that means it is. By not giving you a fixed number of vacation
days, Netflix leaves the judgement call up to you. And there’s a chance this will lead to people
actually taking less vacation days, not more. Have you ever tried to ask your boss for a
favor? Maybe asking for a raise, or a more flexible
schedule? The odds are it was the most nerve-wracking
thing you’ve done in a long time, and the odds are you’ve chickened out more than
once. When vacation days are something you already
have, it’s easier - but if you’re asking for non-fixed vacation days, many people might
find themselves wondering if they’re doing the right thing. But does Netflix actually want you to take
your vacation days? Well, if you look at the website, the answer
is an unambiguous yes! The company prides itself on its flexibility,
and the only real guideline they give for using your company stipend is “use good
judgement” and “Act in Netflix’s best interest”. And they have a two-word policy for vacation
- “Take vacation”! They don’t give any formal guidelines, and
say they intermix work and personal time a lot. That means even if you’re on vacation, you’ll
be doing a bit of work. And they’re probably hoping you’ll spend
some time brainstorming and come into the office with some great new ideas! But in practice, the story might be very different. Every office is an ecosystem, and ecosystems
have seasons. If you’re requesting time off, your boss’
reaction might be very different depending on the time of year. While Netflix doesn’t have traditional “seasons”
like network TV does - where the fall season and sweeps weeks can determine whether the
CEO keeps their job - some times are much more critical than others. If Netflix is about to do a full-court press
for a new announcement, that’s probably not the time for the head of the PR department
to take their vacation. And no one wants a customer service agent
to be on vacation when the latest season of Stranger Things just caused the servers to
overload and a million angry fans want to know why they can’t watch. But how did all of this begin? Back in 2003, no one ever thought of an unlimited
vacation company. Big companies all gave vacation days and tracked
them so no one spent too much time away from the office. But it soon became clear that Netflix was
no ordinary company. They were mostly a DVD rental company at that
point, before streaming took off, but they were already one of the first companies to
take full advantage of the new digital world. Employees were working on the weekend, responding
to emails, and taking off early when allowed. So one employee asked - if they’re not an
old-fashioned company in any other way, why are they on vacation days? CEO Reed Hastings thought about it - and decided
he had a point. Hastings believed that what actually mattered
about employee performance wasn’t how much time you put in at the office, but what you
achieved when it was crunch time. And with a creative industry, there was no
such thing as being totally off the clock - even when you weren’t at the office, the
gears in your mind were churning. And more often than not, employees would come
back from their vacation bursting with ideas. The post-vacation slump wasn’t a thing at
Netflix - and Hastings thought it was time to take full advantage. But not everyone agreed. When the unlimited vacation policy was first
announced, the general response was skepticism and mockery from the press. Most companies were still run as traditional
offices with set hours, and the digital revolution was barely beginning. So how would a traditional office work if
anyone could take off whenever they wanted to? People saw two disasters in the making. For one, without official vacation days, no
one takes a vacation - and workers wind up burning out. On the opposite end, people take vacations
with no regard for the company’s needs, and the company collapses from lack of staff. Hastings didn’t believe either would happen. But he was soon proven wrong. Peer pressure became a serious problem when
it came to taking vacations. Whether you felt comfortable taking a vacation
or not depended on the culture of your department. The marketing department was notoriously full
of workaholics, and one employee who we’ll call “Donna” felt like there was no way
she could let them down. If no one in leadership wants to take vacations,
conscientious workers won’t take them either - no matter how much they need to. But not all departments have the best interests
of the company in mind. The accounting department at Netflix is critical,
and January is the crunch time when they have to turn in their yearly analysis of the company’s
business model. But one year - the year after the vacation
policy changed - the books were late and the company was left hanging. The cause? A critical member of the accounting department
had decided to take the first two weeks of the month off, hoping to skip out on the most
difficult part of work entirely. While it was technically within the rules,
they likely didn’t make themselves any friends. But for other workers, the new policy was
a revolution. One employee was coasting along, turning in
all expected work, and was in good graces with his bosses - who didn’t even know how
much vacation time he had taken, because no one was tracking it! He had taken almost two months' vacation by
October of that year, and it hadn’t caused him any problems because he was well-organized
and kept up on his deadlines. His work-life balance was better than ever,
and no one had any issues as long as his work quality stayed high. But it was clear that the program needed a
little refining. The first step fell on leadership. Many thought they were displaying a good work
ethic by working through the year, but in fact were sending a dangerous message to their
employees. If the boss never takes time off, most employees
will be too worried about giving a bad impression to take their own time off. This leads to an office full of exhausted
workaholics - which is why Hastings takes six weeks of vacation a year himself. And he likes to consider himself a vacation
evangelist, convincing all his department heads to set a good example and take their
own vacations. But no policy can survive in a vacuum. The key to making the policy work was one
word - context. Hastings knew that a disaster like the accounting
affair couldn’t happen again, and some employees would always take advantage by skipping out
on the most difficult part of their job unless something changed. So Hastings puts the responsibility on the
managers again - they know the schedule of their department, and they need to communicate
to their employees when is an appropriate time to take an extended vacation - and when
they’d be leaving their co-workers in the lurch. But did the company’s new policy stand the
test of time? Well, it’s still in effect to this day,
so it seems so! And for Netflix, it seems to be paying off. The company barely resembles what it was in
2003 - now being a streaming juggernaut that not only features some of the most popular
TV shows ever created, but has spawned countless imitators in the streaming world. And it certainly hasn’t lost any of its
productivity, as its digital-forward strategy has led to giving employees more flexibility
than ever. Many work remotely, and remote workers can
work just as easily from their hotel room after a vacation day as they can from their
home office. And that has led to other companies jumping
on board. Kronos, Glassdoor, and most famously Richard
Branson’s Virgin Group added their own unlimited-vacation policies, and the perk was seen as a big attraction
for new hires. After all, who wouldn’t like the flexibility
to go on vacation at any time - and have your job support you and pay your salary while
you’re living it up? It was usually most popular with high-tech
companies that did much of their business online, but even more traditional companies
saw what was happening and wondered if it was time to start competing. But not everyone is behind the new vacation
model. Advocates for workers’ rights say the policy
sounds good in theory - but in practice it might wind up doing more harm than good. They say that employees will be dealing with
arbitrary pressure from their co-workers and bosses, and might feel like they’re falling
behind if they take off too much time for work. This is especially worrisome for Netflix’s
parental leave policy, which allows new parents as much time as they want. But if someone takes full advantage of this
policy, they don’t know what the office will look like when they come back. And not every company has found this policy
benefits them. German tech company Travis CI tried this system,
and found that instead of being helpful for employees, it actually created more office
stress and made things more unequal. Employees were nervous about taking time off,
and no one wanted to be the one taking the most vacation days. It also caused arguments about privilege,
as those who were more secure in their jobs were more willing to take time off - especially
if they had the money to take elaborate vacations. The option to take vacations at any time might
make some people less willing to take a vacation at all. And companies may have another motivation
for trying this policy. Vacation days are a cost for the company,
and every one taken is a liability in their books at the end of the year. So when employees are given a traditional
allotment of vacation days and have to take them before they expire, they’re more likely
to actually spend them. When they have an unlimited number, some think
the company is hoping they don’t actually use them because of the demands of the job
- and wind up taking less vacation days in total than the average, saving the company
money. They think companies should ditch the unlimited
vacation and instead offer generous vacation packages. But Netflix doesn’t see any reason to change. While there were some bumps in the road, the
company’s culture is thriving under the unlimited vacation policy. With managers instructed to encourage workers
to take vacation and to communicate clear expectations about when is NOT a good time
for vacation, the company is expected to continue to keep cranking out content and seeing its
stock price rise. So enjoy your vacation - just don’t expect
it to be the most relaxing vacation you’ve ever had. The producers of The Witcher are on the line. For a look at some of the other big players
in the digital world, check out “YouTube vs. TikTok - Who Will Win?” or watch this
video instead.
