The Pros and Cons of Unlimited Holiday

Unlimited holiday simply means salaried employees can take as much time off as they like, whenever they wish to, so the organisation’s holiday policy, in effect, means it has no policy at all.

This may be why Andrew Drake, head of flexible benefits at JLT Employee Benefits, says: “[Unlimited leave is] 100% a positive benefit but the HR world would probably cringe at the thought of implementing it.”

This is likely to be because of the perceived consequences that could arise from offering a benefit that places so much trust on employees’ judgement and co-operation. For instance, it relies on employees taking full responsibility for their own work to avoid placing any additional undue strain or pressure on their colleagues who may find themselves having to cover or pick up work.

Drake explains that employees therefore need to be considerate of one another when taking holiday. “An immediate pro of unlimited holiday is having as much time off as you need and feeling more motivated and energised. But will some staff take advantage?” he says.

Unlimited motivation:

At a time when the traditional nine-to-five working pattern is no longer the norm for many employees, offering unlimited holiday could result in masses of motivation within a workplace, because employees are likely to feel trusted and that their work is of worth to their employer. Uta Bindl, assistant professor of management at The London School of Economics and Political Science (LSE), explains:

Offering staff something like unlimited holiday signals that their work is valued.

In fact, LinkedIn’s Winning Talent research, published in June, found that flexible-working arrangements would persuade 36% of respondents to take a job, even if their friends and family did not approve.

However, an unlimited leave policy will not be right for every organisation. For example, Maggie Stilwell, UK and Ireland managing partner for talent at EY, believes that unlimited holiday may not be as beneficial as some staff and employers may believe.

With young and more competitive employees, unlimited holiday might work for a while, but in its second or third year it may become a little counterproductive if staff want a sustainable career, she says.

EY offers staff five to six weeks of holiday a year, as well as flexible-working opportunities and enabling employees to buy more holiday through its flexible benefits scheme.

Stilwell believes that employers need to adapt holiday regulations to suit both individual staff and the organisation. After all, employers will see little return from implementing something that a workforce has little, or no, appetite or need for.

[Employers] have to work out whether unlimited holiday fits with their organisation and their clients’ needs.

All play and no work:

How employers position an unlimited holiday benefit is also important to creating the right perception among employees, particularly if some employees take a great deal more holiday than others.

Drake says:

Productivity might go through the floor and employees may not be great assets to employers if they are on holiday all the time. The line between work and play are already blurred, so will they get even more blurred with unlimited holiday in the mix?

Conversely, employers should also ensure that employees actually do take holiday throughout the year. If they are not required to log an allocated number of days, some employees may neglect to take adequate time away from the workplace. Bindl says: “If employees choose to not take holiday, it can lead to them feeling demotivated and the quality of the work they do can sometimes suffer.”

To form a happy medium between workers taking so much time off work they fail to cope with their workload and staff constantly being at work with no break to refresh themselves, employers should set a few guidelines, says Drake.

It’s important that employers establish ground rules, which could include respecting colleagues and their workloads.

Bindl adds:

Employers need to give employees guidelines as to how and when they can take holiday; open communication is the solution.

What staff want:

When web development organisation Visualsoft launched a new benefits package in 2014 to boost productivity, wellbeing and motivation, it became one of the first UK employers to introduce unlimited paid holiday, as well as unlimited flexible working opportunities.

Offering unlimited holiday therefore relies on a balance between what employers and staff need. This is why it is important for employers to ensure unlimited holiday suits the nature of their workforce and the workplace culture. As Drake says:

There’s a danger [employers] could go too far without loose guidelines.

Taken from an article by Marianne Calnan, published by Employee Benefits 29 October 2015

Petaurum Solutions Comment

As employers become more creative and flexible around employee benefits the likelihood of schemes such as these will undoubtedly grow, however employers will need to keep in mind the practicalities of such schemes along with ensuring that whatever benefits are provide remain fresh and valued by employees. If you are looking at providing a range of employee benefits, maybe not as extreme as unlimited holidays, then we can help as we provide free to access schemes right through to the design and delivery of bespoke schemes. Whatever your need, why not contact us as we will have or can develop a scheme for you.

This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal, HR or benefits advice in any specific situation. Petaurum Solutions is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.

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