Goldman Sachs Group Inc., the 153-year-old Wall Street firm synonymous with long hours and a hard-charging culture, is telling some senior employees it won't be capping their days off.

Once reserved for only a handful of technology companies like Netflix Inc. and Twitter Inc., unlimited paid time off has been adopted more broadly in the tight labor market, according to a survey from employee benefits adviser Mercer.

Companies that have adopted the policy say the benefit can minimize burnout and instill a sense of trust among workers.

Goldman said partners and managing directors will no longer have a set number of vacation days starting this month.

The company is also expecting all employees to take a minimum of three weeks away from work each year.

More generous vacation paid time off is an especially important benefit at companies that have less-flexible work schedules and modalities, insurance and benefits provider MetLife Inc found.

Many of these firms have pushed workers back into the office more often and are now looking for other ways to match some of the flexibility seen across other industries, according to human-resource managers.

"It's that blurring of time off and work," said Rich Fuerstenberg, a senior partner in Mercer's health and benefits practice. "You get to a point, as an employer -- why am I going to even try to figure out when you're working, when you're not? Just call it unlimited. Work it out with your manager."

In addition to making time management easier, companies without set vacation time don't need to pay out accrued time off or deal with workers rushing to use vacation days by a certain date.

The policies are popular among employees, who often cite unlimited paid-time-off policies as benefits on company-ratings website Glassdoor. Even so, the track record of workers actually taking more days off has been mixed.

For Goldman, the decision marks the latest in a string of moves it has made to adjust to the banking, trading and deals environment since 2020.

Goldman was one of the more aggressive banks about returning to in-person work and had largely full offices in January. Meanwhile, its business has been booming.

Firms like Goldman have raced to bring workers back into the office and hire new ones to keep up with the flood of deals and frenzied markets.

Banks have more recently paid more to keep these workers. Goldman paid an additional $4.4 billion in compensation in 2021. JPMorgan Chase & Co. and Citigroup Inc. each spent billions more in compensation as well.

In November, Goldman announced paid leave for pregnancy loss, an expansion to the amount of time employees can take for bereavement leave, and the introduction of an unpaid sabbatical for longtime employees.

The company said its decision was designed to further support rest and recharge for workers.

"As a firm, we are committed to providing our people with differentiated benefits and offerings to support well-being and resilience," Goldman said in the email announcing the new paid-time-off policy, which was first reported by Bloomberg News.

Goldman has about 400 partners and thousands of managing directors. It has more than 45,000 total employees.

Employees with unlimited vacation time took about two more vacation days in 2019 than did those with capped days, according to the business software maker Justworks.

That has flipped during the pandemic. In 2020 and 2021, people with a limited number of vacation days took more than one full day of additional vacation compared with those with an unlimited number of days off.

Workplace consultants and human-resources officers say managers and company leaders need to set better expectations for their employees -- including recommending floors for annual vacation or taking time off themselves.

The sales software company Seismic implemented a flexible time-off policy for its roughly 1,000 U.S. employees in January after trying it out with executives last year.

The company recommends that staff take a minimum of 15 days a year but has asked employees not to track days. Previously, vacation days were accrued.

"If you need to take time off, you should," said Linda Ho, the company's chief people officer. "They just felt like a minimum would be a really good way to manage it and set expectations -- we believe employees take, on average, 20-something days per year."

Seismic asks that employees who want to take vacation beyond about three weeks consecutively have additional conversations about whether the absence is a vacation or a longer-term leave, Ms. Ho said.

The company estimates the change in policy will save more than $1.5 million annually in paying out accrued time.

Workers may miss that payout.

Kevin Zeillmann, a software engineer, got several weeks of vacation paid out when he left his prior job in August, a perk he appreciated.

He was skeptical of unlimited vacation policies when he was interviewed for a new role at the software company Kajabi last year. He pressed the company during interviews about how it was used. Still, he took the job.

Mr. Zeillmann took time off to travel for weekend trips, and he now is anticipating two summer vacations -- a family reunion in July and a trip to Cancun with his wife in August.

He worried his manager would perceive the trips as too close together, especially in advance of planned paternity leave in the fall. "He didn't seem fazed at all."