An unlimited holiday allowance is not a new phenomenon but up until recently it was a benefit which was rarely found outside of Silicon Valley tech companies. Although most companies offering this benefit are US-based, companies such as digital agency VisualSoft, social media agency Social Chain and technology platform JustPark are leading the way in the UK.
What is unlimited holiday?
An unlimited holiday or vacation entitlement means an employee is able to take paid time off work whenever they want to throughout the year. For most companies there are no strict rules attached to this perk, however, it appears to be an unwritten assumption for most companies that the employee’s work must be completed before taking said time off. Richard Branson says that all Virgin employees are able to take time off whenever they wish as long as it, “will not in any way damage the business – or, for that matter, their careers”.
Where did the unlimited holiday policy originate?
Netflix started in 2001 and was one of the first notable companies to offer unlimited paid leave, however, Brazilian company Semco has been offering this to their employees since 1981. When Semco first started implementing this policy the company was worth $4 million. They are now worth over $1 billion dollars.
Which companies are adopting unlimited holiday?
Crimson Hexagon, LinkedIn, HubSpot, JustPark, Grant Thornton and Eventbrite are just some of the companies offering this benefit in the UK. Although the list is ever increasing it seems to be proving more popular with technology firms and start-ups. But, I’m fairly confident that many organisations will follow.
Positive reasons for unlimited holidays
Times have changed
One of the main reasons for unlimited holidays the movement away from a traditional 9-5 role. As this becomes more elusive, so does standardising holiday. With advances in technology employees no longer need to be in the office to access their emails and take calls. Traditional hours are on the way out, as they don’t always suit employees, with many companies offering more flexible ways of working.
An unlimited holiday policy can convey trust to employees. By handing the responsibility to employees it makes them accountable for ensuring their work is on track prior to taking any time off.
Focus on results
Whereas staying late at the office used to score you brownie points, society has adapted its thinking and is now more in favour of employees that ‘work smart.’ Efficiency is key at Netflix and if you are able to manage your workflow effectively they believe you should be rewarded for this.
A way of attracting talent
On the surface, the benefit of unlimited holidays is undoubtedly a great way to attract talent. Company review website, Glassdoor states, “Unlimited time-off can play a massive part in recruiting and retaining top talent. Allowing employees to recharge at their own pace, without having to meticulously count their annual leave days. Perhaps it could even result in more productive employees?”
Negative reasons for unlimited holidays
How much time off is appropriate?
Unlimited holidays is a relatively uncommon compensation policy so it can lead to employees wondering, ‘how much time is appropriate to take off from work?’. UK-based technology company, Triggertrap saw employees take an average of 15 days annual leave when they adopted the unlimited holiday policy. 13 days under the statutory minimum.
Some employees may feel pressured to not take time off for various reasons. They may feel guilty about leaving their colleagues to deal with their workload. Or they may feel that their manager will judge them if they’re seen to be taking too much time off.
Some employees may even feel internal pressure, as according to behavioural scientists our decisions are anchored by social norms.
Will it make much difference?
If you had unlimited holidays how many days in a year would you take off? In 2015, business media brand, Fast Company rolled out an unlimited holidays policy to their employees. They found that employees took roughly the same amount of holidays compared to the previous year when they were on a traditional paid time off system.
Doesn’t work for every company
Unlimited holidays inevitably won’t work for every industry, company or department. In particular, Elliott Manning, MD at Kayman Recruitment, believes it wouldn’t work for recruitment companies, “If a recruiter takes three or four weeks off it’s going to affect their pipeline and ultimately over a three-month period of the year, that’s going to affect business. The one-month build up, the month they’re away and the month they come back they are starting again.”
How can you adapt unlimited holidays to suit your business?
Call it something different
Fast Company suggest that adapting the name may help make the policy more successful. “Unlimited” conveys time off as indulgent whereas adapting the name to “flexible,” “self-managed,” “personalized,” or “responsible PTO” may be a better option to help employees understand the purpose behind the policy.
Incentivise time off
If you are worried that employees may feel guilty about taking time off why not incentivise it? That’s what companies such as Evernote and FullContact do. Employees at Evernote are given $1000 spending money if they take at least a week off at a time. FullContact have a policy called, ‘paid paid vacation’, where each employee is given a very generous $7500 per year if they go on vacation.
The rules to gain the $7500 are simple. They have to go on vacation, they must disconnect and they can’t work while they are away.
Unlimited Holiday – a good idea?
Ultimately it really depends on your business and your way of working. However, if you expect your employees to go above and beyond to achieve results, shouldn’t they have a compensation policy which reflects this?