What's Motivating Goldman Sachs' New Vacation Policy? NewsWire

NewsWire: 6/10/22

• Goldman Sachs has become the latest big company to offer its senior employees unlimited vacation. The perk has become a popular recruiting tool, but it’s often questionable if employees actually benefit. (The New York Times)
  
• NH: We recently wrote a NewsWire on companies trying to boost morale through new employee perks. (See "Employers Are Trying to Boost Morale.”) Now Goldman Sachs (GS) is getting in on the action. The investment bank is joining the likes of Twitter (TWTR) and Netflix (NFLX) by giving all of its partners and managing directors unlimited vacation. 
• Goldman Sachs claims that the motivation for the policy change is to minimize burnout. They want senior staff to be able to "recharge" and "take care of their families."  In 2023, these workers are "expected" to take at least 15 days off.
• But many analysts have called BS on the company's supposed generosity and suggest its motives are purely financial. Why? Goldman Sachs is notorious for its culture of vacation shaming. Most employees take very little time off. But under the prior rules, workers were still paid for unused vacation days when they left the company. Now with unlimited vacation, departing employees no longer get that benefit. The new policy saves Goldman Sachs a lot of money when senior staff with high salaries leave the company. 
• It's also questionable if unlimited vacation leads to more days off. According to a 2017 study by Namely, an HR software company, workers with unlimited vacation take two fewer days off a year than workers with set vacation days. People don't want to be accused of misusing the system. (See "Give Me a Break.”) 
• Of course, unlimited vacation isn't always bad for workers. It can be a great perk if managers are genuinely okay with their staff taking breaks. That has always been Hedgeye’s policy. I just doubt Goldman Sachs shares the same mentality.