Unlimited annual leave: PR exercise or game changer?

If you had the opportunity to take unlimited annual leave how would you use it? An extended holiday to visit relatives on the other side of the world? A few cheeky city breaks? Or maybe you’d just take a couple of extra weeks off work to decorate the house?

For some, the ability to take as much holiday as they want is not a pipe dream. According to an article in HR Grapevine, it is estimated that around 9% of companies globally offer unlimited holiday – Workday, Virgin, Netflix, LinkedIn and Eventbrite to name just a few.

unlimited annual leave

There’s an ongoing debate, however, about whether it’s a policy that is good or bad for employees. This kind of initiative certainly give the company a bit of short term PR and may cause excitement among staff in the early days. But will offering unlimited holiday really result in a stream of talented employees banging on the company door? Will the business end up with more motivated, engaged and productive employees as a result?

Critics of such schemes suggest that they can actually have a demotivating effect. Employees aren’t sure what their managers will see as an acceptable period of time off, so end up working extra hours that leave them stressed and not performing at their best. According to an article in Fortune, in the US (where many companies only provide unpaid leave), the number of days employees take off a year has fallen from over 20 to just 16 days. If employees are already feeling under pressure to work harder, what does unlimited really mean?

Many companies will tell you, their main issue isn’t encouraging employees to take more holiday, it’s making sure they use up the holiday they have earned. Come November, the HR department can typically be found banging out ‘use it or lose it’ emails, in an attempts to stop employees from carrying over weeks of leave to the following year. It’s an annual headache for HR, who have to spend time trawling through the paper-work to see who has, and hasn’t taken their minimum entitlement (unless of course, they have the benefit of an automated HR system, which makes keeping track of holiday entitlement and take-up a lot easier).

It’s now widely recognised that all work and no play isn’t good for employee’s general wellbeing, or for the companies they work for. So if unlimited holiday isn’t the answer, what can employers do to help their people achieve better work-life balance and feel they are not permanently shackled to their desk?

The consensus seems to be that a greater emphasis on flexible working is the key. Far too many companies are still only paying lip service to the concept, regarding it as the exception rather than the rule, and despite the legislation, seeing it as something that’s only relevant for those with caring responsibilities.

Fully embracing flexible working isn’t just about making employees happy (although it will almost certainly achieve that). There are hard business benefits too: a more agile workforce, the ability to offer a service to clients over an extended time-frame, more productive employees, etc.

Above all, if people see that the business understands they have a life outside work, they will be far more engaged with their job and willing to go the extra mile when needed. After all, what your people really want is the flexibility to do the things that are important to them – whether that is spending time with family, juggling caring responsibilities or pursuing a personal interest that fulfils them.

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