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Unlimited paid holidays – could it work?

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Holidays are an important part of the employment package. Usually, an average of between 5 and 6 weeks a year of paid leave are offered as a standard in the UK. But what if there was no limit? What if you could have unlimited fully paid holiday?

Some of the bigger American companies that offer this unusual solution to their employees are Netflix, LinkedIn or Roku. As a result of their success, many UK companies are considering whether to offer similar packages to their own employees. Offering staff unlimited paid holiday does not involve offering an indefinite number of days off. The risk of having half of your team disappear to Maldives for 6 months is too high. Instead, the employee puts in a request and the outcome is based on performance and their work being sufficiently done; not on the number of days allocated per year.

What speaks for it?

Research carried out by Small Business Prices shows that additional holiday is currently a popular perk for employees, with 26.28% claiming they would value this over a pay rise. Following the pandemic, it appears that workers value the work- life balance a lot more and knowing that their employer offers the option to buy additional holiday is definitely seen as an advantage. But having no limit to it- would take it to another level- and possibly result in appealing to more candidates.

By trusting the workers to manage their workload vs time off, employers can increase their productivity and efficiency. This removes the sense of entitlement. In addition, it speaks to the workers’ sense of loyalty and could lead to a reduced staff turnover (and then of course, less training = fewer expenses).

But of course, it all sounds too good to be true. There must be some disadvantages to it.

The obvious one that comes to mind is employees taking advantage of the policy and disappearing for vacations too much. But that is not all.

Every time one person takes time off, someone else needs to pick up the slack. So, on one hand we are attempting to create this high trust, high productivity environment, but then on the other hand- the employees start to compare themselves to others and a feeling of unfairness can lead to some serious fallouts in the workplace. Now, as said right at the start, this can only work with a performance check in mind, so you can only have your holidays if the tasks are completed, so in theory there should be no need for anyone having to do someone else’s work. But the team’s ability to meet the deadlines will be affected if they don’t, well…. work as a team – which means, at times, pick some extra tasks from the others.

Something else to consider is the effect of unlimited paid holidays on mental health. Of course, as outlined above, it is great to feel valued and trusted, it is great to have the work-life balance. But if there is no set number of vacation days that one is entitled to, suddenly asking for time off can come with a level of anxiety. This will particularly affect the more conscientious team members, who might end up putting the task at hand above their need to take a break or feel guilty for being away from their work. It can also present a challenge to managers- just because there is no limited number of days a team member can take, it doesn’t mean that there aren’t other reasons to turn the request down.

HR software company CharlieHR implemented a paid unlimited leave policy. They found that staff took fewer days as holiday, as their highly motivated workers felt anxiety about when to take time off responsibly with looming deadlines and the prospect of handovers. Eventually, after three years, the company returned to a limited paid holiday policy. Ben Gateley- the CharlieHR CEO and co-founder- explained: “Numerical limits on holiday allowance don’t just define how many days you have to take that year they also help define what is acceptable behaviour. They act as a company’s handrail, letting everyone know just where the edge is so they can feel confident about where they stand. Unlimited holiday policies take that handrail away.”

In conclusion, we might not be ready for the limitless holiday policy yet. But who knows, maybe with time it will become a new norm, just like hybrid working has. Until then, why not allow staff to buy additional days as required or consider easy access to unpaid leave- an excellent way to ensure that employees have their work-life balance.