An Ode to the Greatest Employee Perk of All
Sep 11th 2013 3:41PM
Updated Sep 11th 2013 3:42PM
Every week, for more than a year now, we've examined some of the most incredible CEOs in the business world. Whether it's through their incredible strategy as corporate heads, their focus on improving shareholder value, or their unparalleled compassion for their employees and the communities they operate in, we've come across a lot of really unique CEOs.
However, this week we're going to take a break from looking at corporate leaders and, instead, focus on what I feel is the most transformative employee perk of all employee perks. I'm not talking about the occasional CEO donating his multi-million dollar bonus to his employees, or the CEO who purchases Apple iPad Minis for his full-time employees. No, I'm talking about the one perk that only 1% of all U.S. businesses currently employs that has the potential to revolutionize productivity and improve employee retention and satisfaction. I'm talking about the unlimited vacation policy!
How can I proclaim this to be the greatest perk on Earth, knowing full well that Google employees have a slide on their campus? Because I work for a company, The Motley Fool, which employs this policy with great success.
The greatest perk in the world
Although I work as a contributor for the Fool in the suburbs of Seattle, The Motley Fool, which is headquartered in Alexandria, Va., allows its employees free reign on their vacation schedule as long as they get their work done. As my Foolish colleague Matt Trogdon noted in an interview with CNN just last week: "We have no-policy vacation policy. We just want you to get your work done, however you're going to do it best."Unsurprisingly, The Motley Fool boasts one of the lowest turnover rates within the financial services industry, and the company has received an incredible 4.7 out of 5 stars on Glassdoor, with 97% of employees (myself included) saying they'd recommend their company to a friend, and a perfect 100% approval rating of our co-founders, Tom and David Gardner. Can you tell I love the company that I work for?
What's incredible is that it isn't just me and my colleagues who are partaking in this amazing perk. Whereas, you might think this is a perk that's dominated by the technology sector, there are quite a few companies divvying out this amazing perk that I'd bet money you would have never, ever guessed.
Companies with incredible time-off policies
Perhaps one of the more obvious beneficiaries here is streaming content provider Netflix , which began offering its employees unlimited time off years ago. According to CEO and co-founder Reed Hastings in an interview with Bloomberg Businessweek, Netflix gauges employee production on the quality of work produced, not on the amount of hours worked. Hastings understands that proper work-life balance needs to be in play for employees to deliver high-quality work and remain responsible. Given that Netflix touched an all-time high yesterday, I would certainly say that it's working.
Now, raise your hand if you expected to see big-box retailer Best Buy among those offering a practically limitless vacation policy? Best Buy operates under the premise of a "results only work environment." Simply put, since Best Buy restructured and moved its employees toward a sales incentive-driven structure, all that matters is how much they're selling. This means hours are no longer kept track of -- only performance matters. If a Best-Buy employee wants to take a vacation, he or she simply notifies the boss of the time off that's needed, and away that employee goes! With the stock tripling this year, like Netflix, I'd have to say that it's working.
Here's another head-scratcher... the Gap ! That's right... the previously struggling clothing retailer comprised of its namesake stores, Banana Republic and Old Navy, offers its employees 20 to 35 days per year of vacation and leave time, another seven days with holiday pay, and has a leave-of-absence program, if that's not enough. In essence, it's like Best Buy's program in that you tell your supervisor that you need time off and, ta-da, you get it! Given how notoriously low most retailers rank on the recommendation front from employees, Gap's 67% recommendation on Glassdoor serves as a reminder of just how unique its perks and results have been lately.
Back in the financial-services sector we have Morningstar , which hasn't counted workers' vacation days since it was founded 29 years ago. Like Netflix and The Motley Fool, Morningstar believes in allowing workers to prioritize their own hours and work flow as they see fit to maximize their work-life balance. Not surprisingly, this method contributes to low turnover, high talent retention, and overall satisfied employees. I'd also retort that it's another reason why Morningstar is trading near an all-time high.
The perfect perk can't cure all
Unfortunately, the perfect perk can't fix everything. Social media gaming giant Zynga also offers an unlimited vacation policy to its employees, but it hasn't seen the same expansionary share price as many of the aforementioned companies. As a developer of social media games that are played by few paying and fickle customers, cranking out winners each and every time isn't likely. As a developer of online gaming platforms, Zynga may still have life -- but this is more of a case of finger-crossing and hoping you're right than actual investing.
Ultimately, no matter how fantastic the perk, it comes down to whether or not the business offers a long-term competitive advantage over other businesses within the sector. In the case of Zynga, that advantage isn't readily apparent. For content-streamer Netflix, or Best Buy, which offers the largest in-store electronics depot within the U.S., there are notable advantages and fluidity to each business that will allow these companies to remain on the cutting edge of their sectors, all while keeping their employees happy with the world's greatest perk.
Here's two thumbs up these companies (and my company) for employing the most transformative perk on Earth, allowing employees to prioritize their own workflow and, in the process, become more responsible than they would ever have been had constraining vacation rules been imposed.
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The article An Ode to the Greatest Employee Perk of All originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of, and recommends, Apple, Google, and Netflix. It also recommends Morningstar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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