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Unlimited Holiday – Genius or Madness?

By Alex Graves, Managing Director

Unlimited Holiday – Genius or Madness?

Unlimited holiday for your staff may seem like an insane policy to adopt but embrace this modern way of working and you can reap the rewards of higher engagement, better productivity and lower attrition – and you’ll be in good company. 

First let’s just take a look at some of the organisations who have an unlimited holiday policy: Netflix, GitHub, and LinkedIn are all long-standing advocates of employee managed vacation time, each spinning the approach in their own unique way to fit their culture.  

In Netflix’s case they were finding that staff worked all hours, sending emails at weekends and delivering work late at night. They weren’t tracking hours worked and a ‘use it or lose it’ policy to holiday allowances would have been incongruous and out of keeping with the company culture. They began offering unlimited holidays back in 2010, complimenting their cultural focus on what people get done rather than how many hours or days they work. As long as staff give their line manager a general idea of where they are and when they are planning on taking their vacation, it’s up to them.  

Similarly, LinkedIn adopted the policy of ‘Discretionary Time Off’ (DTO) in 2015. With no set minimum or maximum days off, employees work with their manager to request time away as and when they need it. Pat Wadors, LinkedIn’s former SVP Global Talent Organisation, says of the approach “We believe DTO… will give our employees the ability to better meet their personal needs, which will then allow them to bring their best self to work.” 

This is undoubtedly the primary benefit of an unlimited holiday policy: giving staff the opportunity to manage their own well-being by choosing the best time to take a break for them, and their families, can significantly benefit the individual’s mental, physical and emotional health.  

Your employees will – basically – be happier. 

Holiday benefit is one of the top perks that an employee looks for in a new opportunity. Research from Small Business Prices showed that 26% of employees value additional leave and flexible working hours over a pay rise.  

 As well as uncapped vacation, software giant GitHub offers unlimited sick pay, flexible hours and balanced, fair family leave. As one GitHub employee said of the company’s policies and culture, “It told me this company valued its employees, wanted them to not burn out, and trusted them to behave like stakeholders in the company and be responsible about their vacation.” Unsurprisingly they hold a 4 out of 5 Glassdoor rating with very high marks for compensation, benefits and work/life balance. 

You’ll attract better, more focused talent. 

It may be surprising to learn that organisations who offer unlimited holiday could see – according to a survey – a fall in sickness leave by as much as 50% and as much as a 10% decrease in staff turnover. Attitudes tend to change across the company as well with managers and employees alike dropping the clock-watching and looking more at the employees output and less at the hours they are sat at their desk. 

So, productivity is higher, and people’s work is recognised.  

What happens when it doesn’t work? 

Ben Gateley, CEO of CharlieHR, cites some pretty interesting psychology behind the reasons why their long-term policy of unlimited holiday actually failed. UK-based HR solutions business CharlieHR was founded in 2015 with a universal policy of unlimited paid holiday, and the leadership team were pretty vocal advocates from the outset. However, they found that people just weren’t taking enough time off. The fear that many have when launching an unlimited holiday policy was quite unfounded in Charlie’s case and – when they did a deep dive into the reasons behind this unexpected behaviour – they found that without a numerical limit assigned to it people didn’t have the sense of ownership they get with a set allowance. The very sense of unlimited – and the possibilities that come with it – meant that they didn’t value their holiday in the same way. As Ben says, “You have all the time off in the world, and all the time to take it in… so you don’t.  (NB. Unlimited-holiday-exemplars GitHub actually set a minimum vacation policy to counteract this very behaviour). 

And then there’s fairness. When working out a traditional holiday allowance structure you’d usually start with a standard base for everyone, and maybe add days for time served, rewarding individual loyalty. New starters may negotiate extra days to match previous holiday allowances, and really long-term employees may get a one-year-only month off, or the chance to take a sabbatical. With unlimited holiday and – by its nature – company leaders playing no part in the distribution of days – one person might take 20 days off in the year while another takes 30. When someone is away, it’s those who remain who may feel they are taking up the slack, and there the seeds of resentment and discord lie. Tempting though it may be for managers to keep a note of days taken and… you know… have a little word with the prolific holiday taker, this undermines the premise that underpins the whole system – that of an unquestionable, mutual trust.   

Because an unlimited holiday policy only works if you are prepared to trust your staff.  

Sometimes this trust is established from the outset, from implementing the policy as you launch, while you are still a relatively small organisation – or it may come as a massive leap of faith as a larger company looks to step change their culture. As well as leaders trusting their staff to take reasonable holiday (to ensure they are rested but not leaving their colleagues in the lurch) your staff need to trust you, and understand that you mean what you say and you aren’t going to renege on the deal.  

Despite these challenges, unlimited holiday can work, and bring with it some unrivalled benefits for company and staff alike. 

And we know this for a fact.  

Here at Silicon Reef we have had a company-wide policy of unlimited paid holiday since we launched in 2017. The strategy sits perfectly at the centre of our Work Happy culture, alongside our standards of flexi-time and home working. We practise what we preach here at The Reef and the way our people elect to work – they choose the hours, they choose the location – means that we have seen the fantastic benefits of employee well-being first hand. Our teams are empowered, energised and engaged at work – and we don’t have to encourage them to take time off as they know, from experience, that they perform and feel better when they are well-rested and have a sustainable, fulfilling work-life balance. 

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