A CEO who gives his employees $2,000 to go on holiday explains why the policy is a good idea

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Since 2011, SteelHouse CEO Mark Douglas has had two policies that have transformed the way his company operates.

Not only do employees at the marketing and advertising company get $2,000 a year to put toward any vacation of their choosing, but the entire company takes a 3-day weekend every month, which Douglas branded "SteelHouse Days."

He said the policies have been tremendous morale-boosters, but they've also helped attract elite talent and improve the company's bottom line.

Here are several reasons why the policy works so well, according to Douglas:

The time off gives people a chance to recharge.

The most obvious reason SteelHouse's policies work is that people are working less and getting more time to enjoy leisure activities.

Combined with the paid-vacation fund, team members get five extra days off each year — one for each month that doesn't already come with a three-day weekend. Many people use a portion of the $2,000 to take trips on those SteelHouse days, Douglas said.

The result is people come back more energized and excited to do their jobs.

The policy encourages team-building among staff members.

SteelHouse Days aren't like normal federal holidays or paid-time off, Douglas said. Since the entire company is shut down, no one is tethered to their device to respond to a team member.

Often, this results in a lot of employees taking trips together and building a sense of unity among the company.

"I think it's important that everyone be able to essentially really, truly leave work," Douglas said. While coworkers are taking a break, they're also forging friendships that help foster better productivity in the office.

A mutual give-and-take mindset gets the best out of people.

People seem to recognise how unusual their benefits are and reciprocate loyalty in their work ethic, Douglas explained.

"Everyone works pretty hard, but I think they feel like there's a give and take," he said.

A lot of people at the company take business trips, which may feel like a vacation at first. But over time they can feel more like a chore. Douglas said the policies help counter-balance the required travel.

A great work-life balance attracts top talent.

Douglas currently has about 3,000 LinkedIn connection requests waiting for him, largely due to how popular his policies have become.

Of course, he can't hire everyone. But he said the recruitment team has heard from countless candidates who say they'd love to work at SteelHouse because they feel the company looks out for their employees.

"We want people who feel like they can choose their job," Douglas said. "Not find a job, but they feel like they can work anywhere they want."

Customers admire the company's dedication to its employees.

Douglas said the company ultimately enjoys more success with customers because they like doing business with a company that thinks so highly of its own staff.

Even if it's inconvenient the company is inactive on a random Friday in April, the goodwill SteelHouse earns tends to matter more, he explained.

"We actually get a comments from our customers not like, 'Wow, you're going to be closed next Friday? That sucks,'" Douglas said. "It's quite the opposite."

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