Why Neighbor Rejected an Unlimited Vacation Policy (And What We Did Instead)

Let’s talk vacation time.

For most startups, “Unlimited PTO” is the default. I put that in quotes because we all know it isn’t ACTUALLY unlimited. You’d be fired if you worked one week and took off the other 51.  

As an HR leader at some of the top Silicon Valley companies, I’ve found that managers AND employees struggle with the ambiguity of an unlimited policy. In an effort to clarify, additional rules and guidelines are created. This increases frustration (wait, you said it was unlimited?) and employee resentment.  

Moreover, hourly employees usually don’t fit in the unlimited policy so there’s a separate one created for them. Not cool.  

Additionally, I found that employees who have an unlimited policy end up taking FEWER vacation days. There’s no baseline on what’s appropriate so they err on the side of not taking too many.  

For these and other reasons, we do NOT have an unlimited policy at Neighbor. What do we do instead?

Every employee, regardless of seniority, gets 20 PTO (paid time off) days per year. On January 1, everyone at Neighbor is given 20 days and it’s up to YOU to use them how you wish. Go on vacation, stay home to take care of yourself or a loved one, take a personal day. Use them how you wish! There’s no second guessing on what’s appropriate. No concerns around abusing the policy.

Here’s your PTO. Take it. Recharge. Enjoy.