Unlimited vacation policies can work—it just depends on where employees are based

Deel’s study finds that “unlimited vacation” policies do not universally increase time off: European employees with unlimited policies took an average of 27 days this year versus 23 with fixed PTO, while in North America both groups averaged about 17 days. The gap reflects policy and cultural differences—Americans and Canadians take less leave overall, with Canadian access to paid vacation slightly lower than the U.S. (73% vs. 77%)—though North Americans at firms with European hires tend to take more time off. Deel’s economist cautions employers to consider productivity and talent risks of demanding long hours, and highlights Stockholm, Berlin and Paris as cities where workers averaged 25+ days off.

Analysis

Deel's cross‑regional survey shows the label of "unlimited vacation" does not uniformly increase time off: European employees with unlimited policies averaged 27 days this year versus 23 for fixed PTO, while North American workers averaged about 17 days whether their policy was unlimited or fixed. The study attributes the gap to policy and cultural differences, noting that 77% of U.S. workers have access to paid vacation versus 73% in Canada, and that North Americans employed by firms with European hires take more time off than peers at domestically focused companies.

The finding that culture and geographic norms drive take‑up more than policy design matters for employers' productivity and talent strategies; Deel’s economist highlights that requiring long hours risks undercutting productivity and recruitment. City‑level results (Stockholm, Berlin and Paris averaging 25+ days) underscore material regional variance that global employers must manage when designing harmonized benefits and workforce plans.

Adjacent signals in the article raise implementation and risk considerations: a $11.5 million discrimination verdict against SHRM highlights legal and governance exposure for HR practices, while OpenAI’s claim of saving 40–60 minutes per day suggests firms may pursue AI and HR tech to offset workload and preserve output as leave increases.

Key Decisions for Investors

• Monitor exposure to HR/payroll SaaS vendors and workforce‑management technology providers like Deel for potential demand as firms seek tools to measure culture, PTO usage and compliance
• For equities in multinational employers, reassess regional staffing, productivity and cost assumptions—expect higher PTO utilization in European operations and potential need for automation or cross‑training
• Watch HR litigation trends and corporate disclosures on PTO policy harmonization and AI adoption as catalysts for both risk and productivity gains; favor companies investing in compliance and productivity‑enhancing tools