Ditching a traditional system of fixed annual leave in favour of unlimited paid holiday is becoming increasingly popular with employers – and their staff – around the globe. For some firms, the move has been prompted by their enforced adoption of remote working. For others, it’s always been the preferred approach.
“We’ve had our policy in place from day one,” recalls Jenny Biggam, co-founder of media agency the7stars, which has allowed staff to take as much holiday as they want since it began trading in 2005. “When we started, I agreed with the other founders to ‘just let each other know’ whenever we were taking holiday. We thought this was really liberating, so we just kept doing it as the company grew.”
The concept is relatively novel to Bumble, creator of the eponymous dating and social networking app. The company started offering its employees unlimited holiday in June after granting everyone a week off.
“The past year has been an important time for us to reflect on the ways we work and how we can best support our teams around the world,” says its president, Tariq Shaukat. “It has become increasingly clear that the way we need to work has changed.”
Other new permanent benefits added by Bumble include bereavement leave in the event of a miscarriage and time off for carers and victims of domestic violence. Moreover, the week off for all staff will become a biannual occurrence.
Reflecting on employees’ responses to the first company-wide holiday, Shaukat says: “A number of people said: ‘I didn’t have to worry constantly about what I was missing – I could actually disconnect. I had no idea how badly I’d been vacationing before that.’ Our new policies reflect what really matters.”
Unlimited holiday packages are correlated with major reductions in time off for sickness and staff turnover
A key advantage of offering unlimited holiday is that it equips employees to manage their work/life balance better. It also “encourages a supportive, purposeful working environment and reduces employee dissatisfaction”, says Rita Trehan, founder and CEO of HR consultancy Dare Worldwide. “Unlimited holiday packages are correlated with major reductions in time off for sickness and staff turnover. Relaxing control and trusting your employees may seem an immediate risk to traditional businesses, but it pays off in the long run.”
The offer of unlimited holiday engenders greater trust between employer and employee, but well-defined ground rules are still required to retain this level of sentiment. Trehan advises employers to determine what the “acceptable use” of a limitless holiday policy looks like and how this works alongside the objectives of the business.
“The system should help people live their lives and achieve their key performance indicators. They should recognise that it will be considered viable only if it continues contributing to their organisation’s performance,” she says. “Clear boundaries tell people what’s acceptable. Leaders should set expectations of what can reasonably be achieved in a given period. Around this, employees should be afforded the flexibility to work how, when and where it’s most conducive.”
A written policy will minimise the potential for misuse, says Gillian McAteer, head of employment law at Citation, an HR consultancy that specialises in advising SMEs and third-sector organisations.
“Businesses that want to take the bold step of implementing unlimited holidays must be clear with their employees from the outset about any restrictions,” she stresses. “It will be much easier for them to tackle abuse if there’s a written policy that identifies what is considered abuse and sets out what actions the business would take in such an event.”
McAteer notes that “identifying ‘reasonable’ behaviour is at the heart of many employment disputes. An employer should therefore give examples of what could be considered unreasonable. An even better approach would be to say that employees are entitled to take unlimited holidays to the extent that it doesn’t adversely affect their performance.”
Seasoned employees who’ve never known anything other than a fixed allowance may find shifting to a take-as-much-as-you-like system quite an adjustment.
“When people join the7stars to start their first ‘proper’ job, our holiday policy feels natural, but it can be confusing for those who join from other organisations and aren’t used to it,” Biggam says. “They can even feel nervous about taking time off. I explain everything fully to new starters during the induction process and remind them to never feel guilty for taking holiday.”
The benefits of a proper break are not to be underestimated, notes Trehan, who says that making this point clear to recruits should help them to embrace the system.
“It shouldn’t become a burden to those who aren’t inclined to take holiday,” she explains. “Staff must feel that they can take time off without looking lazy. This relies on open and clear communication with their managers.”
Outsiders may consider unlimited leave to be a gimmick, compensating for a lack of other benefits. But, when it’s incorporated into a package that genuinely puts the individual’s wellbeing first, it feels natural, Biggam says.
“Giving people freedom is great for any business,” she argues. “Not only does it create great culture; it also helps employees to fulfil their potential. I’m often asked whether people take more or less holiday under our unlimited policy than they normally would. I have no idea – we really aren’t counting.”
