Microsoft introduces a new "Discretionary Time Off" policy

Microsoft employees are getting unlimited time off
The new policy starts on January 16th.

Tom Warren reporting for The Verge:

Microsoft certainly isn’t the first big tech company to adopt unlimited time off. Salesforce, Microsoft-owned LinkedIn, Oracle, and Netflix all offer similar unlimited time off policies for employees.

Let’s be 100% clear on something. Flexible / Discretionary / Unlimited time off, or whatever you call it is a scam. It’s often perceived as a benefit to the employee, but it’s really a benefit to the company and it really needs to be called out as such.

It creates situations where instead of time off being something that you earn and can bank towards a balance, every request is an imposition on your team, versus a clear cut entitlement. It makes your time off almost entirely at the discretion of your manager, and we’ve all had shitty managers. Having the confidence to tell your manager you’re taking your 30th or 35th day off is great, and I applaud you, but you can imagine how a discretionary policy makes those requests a lot harder for most people, especially traditionally underrepresented groups.

But when you have an ever increasing balance of days off, it creates a real signal to you, your manager and your organisation that you should take time off. And that creates a culture where time off is healthy, almost an obligation to be met.

Time off is a monetary benefit, treat it as such

Unlimited Time Off is 100% a balance sheet benefit to the company, as they don’t have to pay out accrued time off when an employee leaves. You’ll find that in most companies with these policies, the contracts of employment, which are really what matters at the end of the day, will be crystal clear on this point. You’ll only accrue the minimum required by law, and not a minute more.

Salesforce in Ireland used to have a policy called “Holiday Buy Back”, where you could sacrifice a day’s salary to buy a day off. When I pointed out it should be more accurately just called “unpaid time off”, I could almost hear the confusion coming from HR. So trust me when I tell you, your company considers time off in financial terms, and you absolutely should too.

If not unlimited, then what?

There’s at least two alternatives in my mind that are better than unlimited time off.

First off, give, you know, actually very generous time off balances. And make them consistent globally. So basically, if as a company, you’d expect a median of 28 days off under an unlimited time policy, then just make that the allowance.

The second, and better way in my mind is Minimum Time Off. All the benefits of unlimited, but without the downsides. Codify a generous minimum, and then let people take more if they want.

When I’ve been a manager at companies with unlimited time off, I have always implemented it as a minimum time off policy. I tell my team that I expect that by the end of the year, everyone has taken at least 25 days off, and that if we get to mid November and people are short of that, I’m going to be sending them home.

So if you’re a manager in a company with “unlimited” policies, I’d encourage you to take a similar approach to me, but always remember to advocate for the policy to fixed org wide, because it’s a better policy for everyone.