Why this company wants to implement an unlimited holiday policy

Yesterday I had a meeting with the CFO of a company that wants to implement an unlimited holiday policy. Cases, where companies have implemented this kind of policy, have shown that unlimited vacation days can have big beneficial effects on employee happiness, employer branding, sickness rates and productivity.

Unlimited vacation is a benefit that gets truly highly valued by your employees and that is financially beneficial as well. And the best part is, you will have a huge head start on your competitors when it comes to hiring top talents because not many companies offer this kind of benefit yet.

Why are unlimited holidays so much valued by employees?

From other experiences, we can learn that on average your people will not take a lot more days off after putting an unlimited holiday policy in place. The amount of days off is in most cases more or less the same, or sometimes even less than before. Also, most companies feel that people are very responsible about taking time off.

And although people don’t really take more time off, unlimited vacation policies are hugely valued by employees.

Studying these cases come roughly to the same conclusions about the reasons why:

People mostly value the possibility that they can take the days off if they want or need to take more leave. It does not mean that they actually will take a lot more time off, just because they can.

By leaving the responsibility of the number of vacation with your employees, you also give a huge sign that you really trust your employees and you encourage ownership, and that is something that gets very highly valued.

Another benefit, often overlooked, is that you give the employees the opportunity to take days off on other than the national holidays of your country, or the holidays days of the main religion in your country. This is especially important if you have an international startup, with people from different countries, religions and ethnic background, like this example from Buffer. It increases inclusion and diversity.

It is about trust, being treated as an individual, and the freedom to decide for yourself how much time off you need.

In my meeting, I asked what it would bring the organization if they would implement this policy successfully, and I loved their answer! In short, they want to create a safe environment where employees feel free to take the days off that they need in order to refresh, recover, or to manage a better work/life balance. Creating that will allow the employees to perform better when they are at their job.



What does it take?

Before implementing an unlimited holiday policy, make sure your company is ready in terms of culture, and levels responsibility and ownership, and management style.

A few years ago, when Virgin introduced their unlimited holiday policies, many people had criticism or anticipated risks. It is important to understand that these kind of arguments are usually valid if based in the context of an organization where the culture is not fit. Make sure to have a good look at your organization and work on culture first, before implementing this policy.

What are the risks?

Before implementing, there are a few main risks to consider, depending on your specific organization.

The first is an obvious one: employees who abuse the policy.

When your current culture is not fit to implement unlimited holidays, there is a major risk that the policy gets abused by a significant amount of employees, spreading that behavior through the organization, which could have major consequences for your company.

When the problem is not cultural, there might be individual employees that abuse the policy. When this is the case, it is usually a performance problem or a sign that something else is off with this employee.

Therefore it is important that the individual manager will be alerted and makes sure to address this. And, as I explained in my meeting, this is a “good risk”; individual problems come to the surface sooner rather than later.

Another risk is that people do not take enough holidays. That can lead to legal risks in countries where the law requires a minimum, and also, of course, the risk that the policy will be counterproductive in terms of employee well-being and productivity.

Therefore I would recommend having a minimum holiday policy in place, and to make sure both management and peers create a culture where taking time off will be encouraged.

Implementation guidelines

In my meeting, I guided the company through the steps it requires to a successful implementation.

It is important is to align the management team on the reasons why, and how to act in case problems arise. Next step is to make sure middle management has a clear understanding understand what kind of environment they need to create. And last but not least: prepare your employees to avoid uncertainty and feelings of insecurity.

Don’t wait, just implement

Creating a culture of trust and ownership is crucial to your success as a startup or any other innovative company. Granting unlimited vacation is nothing more than a natural next step, which in turn reinforces your culture. And don’t wait for your competitors to beat you to it!

Have a chat with us!

Not sure if your organization is ready? Questions about implementing? Send us an email!