What does unlimited annual leave actually look like?


More and more companies are offering staff unlimited leave, including one in Australia. HRM looks into if, and how, it has worked.

Netflix has proved that offering staff unlimited annual leave can actually work. The online streaming service has been doing this since the early 2000’s and it doesn’t seem to have impacted their productivity levels whatsoever.

Netflix’s staff argued that because they were no longer putting restrictions on their work hours, as technology has aided a 24/7 availability culture, it didn’t seem fair to place restrictions on their leave either. This soon became common practice amongst companies in the US and the UK, however Australia has come into the game a little later.

A never ending supply of ‘rebalance’ days

Two years ago, Amantha Imber, CEO and founder of Australian firm Inventium, introduced an unlimited paid leave policy to her workplace and says the data speaks for itself.

“Prior to introducing the policy, staff were taking off an average of 19 days per year.  At the end of the first year that had gone up by about four days and now, at the end of year two, we’re sitting on 27.2 days per year,” she says.

This equates to nearly two extra weeks of leave per year, per staff member. Imber says the policy also saw a decrease in sick leave being taken, dropping from an average of two and a half days per year to 1.37 days.

“Looking at that from an engagement point of view, qualitative data suggests there is a huge difference between staff feeling stressed and risking being close to burnout, which is where some of our team were when we first introduced the policy, to now feeling as if they have the time to do their work.”

The best part of the policy, she says, is that staff are more aware of the mental wellbeing of their peers. If an employee has been burning the candle at both ends, colleagues often suggest they take some leave – they call it a ‘rebalance day’.

Great in theory, but how do you make it work?

According to Imber, it’s got to come from the top. “As a leader in the business, I was very conscious of making sure I was taking more than the normal four weeks of per year. It’s critical to lead by example,” she says.

It’s also important for her staff to know when they are most cognitively alert, so they can mould their rebalance days to suit them.

“You need to know, and work to, your chronotype. Some people are morning people, some people are night people and then others fall somewhere in between. Unfortunately, the corporate world favours morning people and is biased against those who are night people.

“In my team, we’ve all done an assessment that tells us which end of the spectrum we’re on and everyone is encouraged to work that way. I work better in the mornings, that’s when I get my focus thinking and analytical work done. As a general rule, I won’t be answering calls or looking at my inbox until around lunch time because I’m focused on my own goals rather than reacting to other people’s needs,” she says.

Potential risks: “This model isn’t for everyone.”

While Inventium’s staff have been respectful of this new leave strategy, Imber acknowledges that there are potential risks when introducing a policy such as this. If your staff are already showing low engagement, there’s a chance they could abuse a system like this.

“This model isn’t for everyone. Research shows that actively disengaged staff are likely to abuse all sorts of policies. It works really well in organisations where there is a high level of trust between management and staff. If staff are highly engaged they want to do what’s best for their team, the organisation and for themselves,” she says.

There’s also a risk that by shining a light on your organisation’s leave policy you could potentially scare employees off from taking leave, they’ll be afraid as being seen as uncommitted to their job. If that happens, they may end up not taking off enough leave.

Imber says this has happened in the past, as people fall victim to ‘the guilt factor’. “When there’s ambiguity about something, people tend to opt for the more conservative side because they don’t want to be seen as breaking a rule or abusing a policy. They want to be seen as good staff members and if there’s a perception that taking less leave makes you a better employee then that becomes problematic.

“Think really carefully before you introduce something like this because it’s a relatively hard thing to take back.”

Would an unlimited leave policy work in your organisation? Leave your comments below.

 


Gain the skills and understanding to develop and implement HR policies that are relevant, clear and effective in your organisation, with the AHRI short course ‘Develop and implement HR policies’.

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11 Comments On "What does unlimited annual leave actually look like?"

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[…] Unlimited Annual Leaves – from HRM […]

Bert
As a HR Manager for a Global Company based in Mid West – we have rolled out Unlimited Annual Leave to the Australian entity. It’s really a US benefit to catch up to the AU/NZ/UK entities as we have the 20 days Annual Leave. They have 10 days Annual Leave and at-will employment. Employees get their contractual allowance that they are entitled to. Should they use all of their contractual allowance during the year and they are out of probation, performance is fine and it doesn’t leave their team in the lurch then they can request additional leave. If their… Read more »
Shelley

Would you have to rethink your conduct policy to account for those abusing the leave policy?

Great idea but I agree, not for everyone.

Hannah

Also interested as to whether or not this is Paid leave?

Kirsty

Curious what happens when an employee leaves the company. Do you still track leave and ensure any underuse of leave is paid out on termination. As per Fair Work minimum entitlements must be provided.

Michaela

I had a friend in such an organisation and they did a reconciliation when a person left and paid out any unused leave to ensure a persons NES entitlement was meet. My friends experience was people tended to still take there 4 weeks or a little less mostly.

More on HRM

What does unlimited annual leave actually look like?


More and more companies are offering staff unlimited leave, including one in Australia. HRM looks into if, and how, it has worked.

Netflix has proved that offering staff unlimited annual leave can actually work. The online streaming service has been doing this since the early 2000’s and it doesn’t seem to have impacted their productivity levels whatsoever.

Netflix’s staff argued that because they were no longer putting restrictions on their work hours, as technology has aided a 24/7 availability culture, it didn’t seem fair to place restrictions on their leave either. This soon became common practice amongst companies in the US and the UK, however Australia has come into the game a little later.

A never ending supply of ‘rebalance’ days

Two years ago, Amantha Imber, CEO and founder of Australian firm Inventium, introduced an unlimited paid leave policy to her workplace and says the data speaks for itself.

“Prior to introducing the policy, staff were taking off an average of 19 days per year.  At the end of the first year that had gone up by about four days and now, at the end of year two, we’re sitting on 27.2 days per year,” she says.

This equates to nearly two extra weeks of leave per year, per staff member. Imber says the policy also saw a decrease in sick leave being taken, dropping from an average of two and a half days per year to 1.37 days.

“Looking at that from an engagement point of view, qualitative data suggests there is a huge difference between staff feeling stressed and risking being close to burnout, which is where some of our team were when we first introduced the policy, to now feeling as if they have the time to do their work.”

The best part of the policy, she says, is that staff are more aware of the mental wellbeing of their peers. If an employee has been burning the candle at both ends, colleagues often suggest they take some leave – they call it a ‘rebalance day’.

Great in theory, but how do you make it work?

According to Imber, it’s got to come from the top. “As a leader in the business, I was very conscious of making sure I was taking more than the normal four weeks of per year. It’s critical to lead by example,” she says.

It’s also important for her staff to know when they are most cognitively alert, so they can mould their rebalance days to suit them.

“You need to know, and work to, your chronotype. Some people are morning people, some people are night people and then others fall somewhere in between. Unfortunately, the corporate world favours morning people and is biased against those who are night people.

“In my team, we’ve all done an assessment that tells us which end of the spectrum we’re on and everyone is encouraged to work that way. I work better in the mornings, that’s when I get my focus thinking and analytical work done. As a general rule, I won’t be answering calls or looking at my inbox until around lunch time because I’m focused on my own goals rather than reacting to other people’s needs,” she says.

Potential risks: “This model isn’t for everyone.”

While Inventium’s staff have been respectful of this new leave strategy, Imber acknowledges that there are potential risks when introducing a policy such as this. If your staff are already showing low engagement, there’s a chance they could abuse a system like this.

“This model isn’t for everyone. Research shows that actively disengaged staff are likely to abuse all sorts of policies. It works really well in organisations where there is a high level of trust between management and staff. If staff are highly engaged they want to do what’s best for their team, the organisation and for themselves,” she says.

There’s also a risk that by shining a light on your organisation’s leave policy you could potentially scare employees off from taking leave, they’ll be afraid as being seen as uncommitted to their job. If that happens, they may end up not taking off enough leave.

Imber says this has happened in the past, as people fall victim to ‘the guilt factor’. “When there’s ambiguity about something, people tend to opt for the more conservative side because they don’t want to be seen as breaking a rule or abusing a policy. They want to be seen as good staff members and if there’s a perception that taking less leave makes you a better employee then that becomes problematic.

“Think really carefully before you introduce something like this because it’s a relatively hard thing to take back.”

Would an unlimited leave policy work in your organisation? Leave your comments below.

 


Gain the skills and understanding to develop and implement HR policies that are relevant, clear and effective in your organisation, with the AHRI short course ‘Develop and implement HR policies’.

Leave a reply

11 Comments On "What does unlimited annual leave actually look like?"

avatar
  Subscribe to receive comments  
Notify me of
trackback

[…] Unlimited Annual Leaves – from HRM […]

Bert
As a HR Manager for a Global Company based in Mid West – we have rolled out Unlimited Annual Leave to the Australian entity. It’s really a US benefit to catch up to the AU/NZ/UK entities as we have the 20 days Annual Leave. They have 10 days Annual Leave and at-will employment. Employees get their contractual allowance that they are entitled to. Should they use all of their contractual allowance during the year and they are out of probation, performance is fine and it doesn’t leave their team in the lurch then they can request additional leave. If their… Read more »
Shelley

Would you have to rethink your conduct policy to account for those abusing the leave policy?

Great idea but I agree, not for everyone.

Hannah

Also interested as to whether or not this is Paid leave?

Kirsty

Curious what happens when an employee leaves the company. Do you still track leave and ensure any underuse of leave is paid out on termination. As per Fair Work minimum entitlements must be provided.

Michaela

I had a friend in such an organisation and they did a reconciliation when a person left and paid out any unused leave to ensure a persons NES entitlement was meet. My friends experience was people tended to still take there 4 weeks or a little less mostly.

More on HRM