Why Are More Companies Adopting an Unlimited Holiday Policy?

How happy are you with your annual holiday allowance? We’d all enjoy a couple of extra days-off a year of course, but what if there were no restrictions on the amount of holiday you could take?

Although originally a US creation, it’s an initiative that has proved popular in the UK too. In fact, research by jobsite Total Jobs showed a 10% increase year-on-year of companies adopting unlimited holiday policies, and unsurprisingly it’s tech focused startups who are championing this new way of flexible working.

From an employee perspective, not putting a number on holiday allowance sounds like a sweet deal. But why are organisations so keen to adopt this new approach to leave?

Better work/life balance

The industries which have adopted this new approach to annual leave – digital, tech, design and media – often require staff to work long hours to meet tight deadlines. Unlimited holiday is designed to combat employee burnout by giving them more chance to recover, so that they’ll be operating at full capacity when they return, benefiting both the employee and the business.

To attract the best talent

Unlimited holiday is also an attractive perk for potential candidates, particularly the younger ones. A recent survey by luxury travel providers eShores showed respondents considered holiday allowance as the second most important factor when job searching (after salary). Clearly then, having an unlimited holiday policy is worth shouting about if you want to attract the pick of the talent.   

So, you’re allowed as many days off as you like and the business benefits from it? What’s not to love?

Well, a quick Google search of ‘unlimited holiday’ shows it’s not without its problems. Many organisations have tried, and failed, to implement an unlimited holiday policy, and reverted back to a more traditional approach. Here’s why:

Employees take advantage

As you might expect, some people will take liberties. Having an unlimited holiday policy requires employees not to take ‘unlimited’ too literally. A few days off here and there isn’t a problem, but jetting off to Hawaii for a month and leaving your colleagues to pick up the slack, won’t do much good for business productivity, or workplace moral.

Employees don’t take advantage

However, it’s far more likely employees won’t take enough holiday. With no definitive number of days to take, employees end up not valuing holiday in the same way. While in the UK, employers are legally obliged to ensure that employees take their minimum entitlement, the emphasis lies on the employee, rather than the employer to define how much holiday they should have. This can lead to a culture of anxiety and an environment where colleagues look to each other to determine the amount of holiday they should book.

What’s more, the organisations who have adopted unlimited holiday already tend to be those with the most demanding and pressured workplaces. In these environments, employees can be made to feel guilty or judged for taking time off, and so will be less likely to do so.

Adopting an unlimited holiday policy isn’t for everyone, and its success can largely hinge on a company’s culture and size. Bigger companies seem to have greater success – with more resources to put into making it work and employees feeling less exposed when taking time off. If you are thinking of giving unlimited holiday a go at your organisation, it’s important to make a clear annual leave policy to tell employees what you expect from them and to make sure that everyone can access this information easily, using an online HR system for example. And, if it doesn’t work out, there’s no harm in going back to more tried and tested methods of managing holiday.