Unlimited holiday allowance is a concept that is being widely adopted by most famous companies across the globe. Chasing their success, small businesses often try adopting it as another trend. But they don’t often understand it fully. In this article, we will advise business owners and directors on whether this is the path for them to follow by addressing some common misconceptions.
Unlimited holiday allowance is one of the trendiest work perks currently offered in the corporate world. From Silicon Valley tech giants like Netflix and LinkedIn to small UK-based start-ups, the concept of unlimited annual leave is spreading like wildfire.
What’s not to like? From an employee’s point of view, they get as many days of annual leave as they care to take. All paid for. And no CEO with an eye on the bottom line would reject the idea of happier workers. Let alone a fast track to attracting skilled talent. It’s a classic win-win. If anything, it almost sounds too good to be true… And it is.
Is Unlimited Holiday a Good Idea?
There is no one for all answer. Some business structures do not support unlimited holidays, whereas others have an optimal environment for such an approach. Additionally, the existing office culture plays a big role in how successful the adoption of the model is.
According to an analysis from Indeed, the number of companies offering unlimited paid annual leave has more than doubled over the last two years. However, despite this rise, as a workplace perk, it remains a rarity
7 Myths About Unlimited Time Off
Unlimited time-off allowance does come with its limitations. Here are seven myths you should have debunked before taking the plunge:
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It’s a model available for every business
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Your staff will have more time off
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It contributes to healthier office culture
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Every worker dreams of it
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Unlimited means no limit
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It’s the best solution to a work-life balance crisis
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It simplifies holiday entitlement
1. Unlimited Holiday Works for Every Business
Unfortunately, not all roles are suited to unlimited annual leave. And offering it to some workers but not others hardly seems fair. Companies that try to give staff the chance to ‘earn’ extra days of the holiday will also run into difficulties implementing the scheme. If you can’t create equal opportunities for all of your staff, you shouldn’t try adopting this approach. It is likely to either damage in-team relationships or disrupt business operations.
Additionally, there are always going to be busy periods when workers are needed on-site. And you can’t always predict when those busy spells will occur. That’s why it tends to be larger, well-established brands offering the perks. They are the ones that can plug gaps more easily.
2. It Encourages Staff to Have More Time Off
You’d think that a limitless holiday policy would lead to staff taking lots of time off. However, the opposite is often true.
Studies have found that employees end up taking less time off than they usually would. That’s because often the rules are unclear. For example, not everyone understands how many days constitute unlimited. Workers then end up feeling uncomfortable about how many days they can take and tend to book less time off.
3. It Will Create a Better Work Environment
If some employees are frequently out of the office, those left behind have to pick up the slack. Any abuse of the system is likely to lead to feelings of tension and mistrust. Both of these are deadly for relationships.
As your teams grow sourer towards one another, it will start reflecting in their performance and your business as a whole. At best, this is going to create unnecessary stress in terms of staffing and work output. At worst, it could lead to growing gaps in team alignment and conscientious employees quitting.
4. Your Staff Will Love It
Even if you don’t have staff members abusing the system, limitless annual leave could leave staff feeling guilty about the number of days they take off. Even though they are entitled to it. This is especially true in smaller teams and start-up environments.
This could lead to toxic rivalry between employees who takes less time off. While this may seem like something that might increase productivity, the effect will be the opposite. Time off is crucial to avoid burnout, and having an unhealthy office competition is a quick route to that.
5. It is Truly Unlimited
The word unlimited is confusing. Aside from the fact that most people don’t have the money to take endless holidays, no business can sustain too many employees being off for a prolonged time. It’s unrealistic to be on holiday more than you are at work.
On the whole, the companies offering this perk are busy tech brands where extended holidays simply aren’t an option. Despite the perk of unlimited annual leave being on the table, it’s naturally expected that staff will be using it sparingly. And therefore most companies have an unofficial cap on how much time off can employees actually take.
6. It Creates Perfect Work-Life Balance
The concept behind unlimited holiday allowance is that it boosts the work-life balance. In theory, this makes total sense. But if a worker decides to take an extended holiday, they could end up bombarded with work when they return, working 24/7 to catch up.
Basically, this system works on a concept of borrowed time that then has to be returned with a fee. While it does allow staff to have more time away from work, it then demands them to put on extra time into clearing the backlog. In other words, the means of creating balance are actually causing disbalance.
7. It Helps Avoid Holiday Entitlement Confusion
Quite the opposite. It makes it even more confusing. If an employee leaves a job with a fixed holiday entitlement, they get paid for the unused holiday. Or, when staff do not take their full allowance, they can accrue days for the following year.
In the case of an unlimited holiday allowance scheme, the rules are not clear. The workers lose what’s entitled to them, and it’s the employer who ends up benefiting financially. While this is not illegal, this can cause frustration among the employees and lead to mistrust towards the management.
Summary
The unlimited holiday allowance is great in theory. But is riddled with nuances in practice. Whether it’s implementable also depends on many factors, ranging from company size to team culture.
If your business is considering adopting this scheme, you’ll need to set boundaries. Focus on clarity for both, the employees and yourself. It’s paradoxical, but for creating the perk of unlimited annual leave, you are required to set very clear limitations.
Not sure where to start? Drop us a line, we’ll introduce you to our holiday management tool and more.
