Unlimited Holiday: The Pros and Cons

Sophie Gane

21/06/2016
Categories: Wellbeing, Culture

Much has been made of the sensational upturn of ‘unlimited leave’.  If you’re thinking of introducing it but don’t know where to begin, help is at hand.  We’ve looked into the pros and cons of the unlimited policy (henceforth also known as ‘flexible leave’, because, let’s face it, you can’t just take every single day off…) 

One thing which we absolutely cannot stress enough is:

Unlimited leave will not solve your employee engagement issues

There, we said it. There are plenty of reasons to introduce flexible leave (which we’ll go into later), but in essence, although unlimited leave can work in the way you want it to, it will only have a positive effect on your business if your workforce is already engaged.  If you think about a time when you might have had an issue with a disengaged member of staff; giving them the option of additional leave would not have solved anything as it doesn’t tackle the root issue.  So, flexible leave is best viewed as a way of rewarding engaged staff.

Pro: Culture of Trust

In the ‘Pro’ camp, we have the effects of unlimited leave on your company culture.  Offering the benefit of unlimited leave helps to create a culture of trust in your workforce.  You’re placing absolute faith in your employees and management, and giving them ownership of what is, when you think about it, their own wellbeing.

In return, they will see the value you’ve invested in them and this will strengthen their loyalty to you.  Hand-in-hand with this, your employees will see that you view them holistically; they are humans, after all.

Pro: Health, Wellbeing, Productivity

Creating a culture of trust will inevitably lend itself to the improvement of your employees’ health and wellbeing.  Companies which already offer flexible leave have all maintained that a healthy work-life balance for their employees has been their main motivator for introducing the policy.  The natural by-product (and ulterior motive) of this is increased productivity at work.  You don’t need to be Richard Branson to know that an engaged workforce with a balanced home life will be more motivated to produce, achieve, and impress at work, plus they’ll take fewer sick days. Bonus!

Pro: You’ll Attract Younglings

This brings us on to the dreaded ‘M’ word.  Nope not ‘Monday’ or ‘maths test’… Millennials.  It is undeniable that the expectations of your workforce are changing, and although I’m loathe to group two entire generations under one umbrella, the trend seems to be that your younger staff value time off and life experiences over salary and consumables.  This is where unlimited leave can play its part in increasing motivation among young workers; the idea of working towards a trip often drives productivity, which also lends itself to improved financial wellbeing.

The appeal of unlimited leave will also be of great value when it comes to attracting new talent.  Young workers are increasingly confident of finding other employment, so unlimited leave could be a benefit which sets you above the others.

Pro: More Holiday, Fewer Sick Days

Now to the nitty gritty; does unlimited leave make economic sense?  There’s no denying that covering additional holiday – particularly when it comes to hourly paid staff – could result in additional costs when introducing unlimited leave.  However, this cost could potentially be recuperated when you factor in the reduction in sick leave and overall health benefits of introducing an unlimited scheme.  And that’s a £29 million bill that UK companies could really do with cutting.

Neutral: People Don’t Take More Holiday

One thing which is polarising the argument on unlimited leave is the fact that, so far, companies have found that their employees have taken much the same amount of leave as they already had been in previous years.  So what’s the point if it doesn’t actually affect people’s time off?  Fast Company – who experienced exactly this outcome – believe that it’s because unlimited leave is “at least as valuable for what is says as for what it does.”  I.e., it creates that culture of trust, engages your workforce, and shows you to be a responsible, caring employer, which in turn breeds loyalty.  Plus, if you have an emergency at home, or a sports day to get to, it’s the knowing that the leave is there which can go a long way to improving engagement and your team’s wellness.

Con: Employees Won’t Take Enough Holiday

Leaning into the 'Cons' territory is the fact that a lot of people just won’t take any leave.  You may find that employees struggle with leave becoming a ‘non-policy’.  When there aren’t guidelines and limitations laid out, some of your workforce may have a tough time with requesting holidays, and conform to ‘presenteeism’.  When you see in your contract that you have, say, 25 days to take as holiday, you see those days as obligatory and you begin to plan around them.  But, to some employees, the word “unlimited” might as well say “none”.

The rush to use up all your leave at the end of the year is a fairly common occurrence, which causes problems for a lot of companies at the close of the holiday year, so for the business, this is where unlimited leave is an advantage.  But for the individual, the “use it or lose it” approach to accrued holiday at least means that people feel obliged to take their time off and get some well-deserved rest.  Once you remove this urgency, you could see a downturn in motivation and engagement because people don’t have a holiday guideline to adhere to.

You at Least Need a Minimum

One antidote to this would be to implement a minimum holiday limit and actively encourage your team to take it.  Management can set this example; the presentee issue will not be quite so much of a problem if your team see you’re happy with taking leave yourself.

Pro: When it works, it really works.
Con: Flexible Leave Could Be Exploited

One of the worries is that people will take advantage of the lack of guidance, and will overuse their leave, which leads to underachieving.  This is where your KPIs will come into action.  The prevailing attitude at Netflix is, “as long as we're seeing results, what does it matter when and where people work?” Semco is a Brazilian company which has been offering its employees unlimited leave for 30 years.  They found that their productivity increased almost immediately, and that their employees were fiercely loyal to the company.  So, you just need to caveat any unlimited leave policy with prioritising the needs of the business.

Con: “Unlimited” is somewhat misleading…

Having said this, many companies who have implemented flexible leave stipulate that it must still be “agreed by a manager”, that it “doesn’t affect the team,” and they repeat the phrase, “the needs of the business,” over and over.  Taking these limitations into account, you could always find a reason to refuse a leave request, so the danger is that – without a fixed leave amount – your employees could end up taking less and less leave, which will ultimately have a negative impact on their motivation and engagement.

Quality Over Quantity

A way of combatting this is to eradicate the clock-watching attitude, and consider an individual’s overall contribution rather than their presence when it comes to approving leave.  This doesn’t mean saying ‘yes’ to every single leave request, but amending the approach of presenteeism into one which measures genuine, tangible results will be the only way you and your employees will get the most out of an unlimited leave policy.

Well, I don’t know about you, but I got a GCSE in maths, and – including half-marks – I calculate that as five ‘Pros’, three ‘Cons’.  Now, where did I put my passport…?

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.