[DaniFong]

Most successful YC companies, for instance, cannot simply shut down for the entire month of August. In others, teams are so tightly coupled that the business wants vacations as synchronized as possible. It all depends.

We're certainly in the latter category, so this is an important distinction. I do think groups in product organizations have this freedom where operational groups don't, though something similar may be possible there.

But remember the iron law of supply and demand. If a company provides a benefit (say, "months of paid vacation any time of the year on no notice"), and the market values that benefit, candidates will factor that into their compensation negotiation and the salary the company needs to pay for a given level of quality will decrease. In other words: you're paying for the vacation policy one way or the other.

I don't really think that talent is best thought of as an efficient market. People are empirically quite limited in their ability to perceive ahead of time the situations in which they will be the happiest or most productive, and salaries seem to be primarily determined by societal norms.

For us, the decision mostly hinges upon whether or not our employees will actually be happier, more creative, and ultimately more productive under the new model. The policy might sway a few candidates that would otherwise look elsewhere, and it might retain several candidates confronted with lucrative alternative offers, but ultimately it's how it will effect the team's spirit that really matters.

[tptacek]

I'm not sure it takes an efficient market for candidates to be able to do a simple math problem. The company that offers 4 weeks vacation a year pays a $90k salaried employee the equivalent of $51.10/hr; the company that offers 6 weeks vacation pays $53.50/hr, or 5% more.

Comp clearly isn't the only reason people pick jobs, but it's a big reason.

There's a "quality of vacation" point you're making, but generally I think the real issue there is that employees are pushovers, and ask permission to use all their vacation time all at once, instead of just informing their employer that they're going to take July off.

[bugsy]

Myself I pretty much don't do jack shit in any given hour of the year, so I guess companies that would hire me at those rates are getting ripped off since they aren't getting anything for their money.

On the other hand, over the period of a year, I am amazingly productive and product thousands of times more value than the typical engineer.

Interestingly, the less down time during that year, the fewer incredibly valuable things I make.

[bugsy]

It's a bit frustrating to see very insightful contributions like my comment here downvoted. Downvotes isn't meant to be for good points. Let me make it more explicit though for people who have difficulty understanding things.

ENGINEERS THAT CREATE THE THINGS YOU SELL DO NOT CONTRIBUTE BY THE HOUR. THEY CONTRIBUTE BY THE QUARTER, THE YEAR AND THE DECADE. HOURLY WAGE CALCULATIONS ARE THE WRONG WAY TO CALCULATE HOW MUCH THEY ARE PAID BECAUSE THEIR FUNDAMENTAL UNIT OF TIME ISN'T THE HOUR. WERNER VON BRAUN DIDN'T DO ANYTHING NOTICEABLE IN ANY GIVEN HOUR OF DESIGN WORK.

What does this mean in practice to the MBA set? It means that measuring engineering work as cost per hour means there is something seriously wrong with your company because you don't understand the fundamental nature of the work.