Why Unlimited Annual Leave is A Lie

These past years, you also might have been reading a lot about unlimited vacation. Here’s why I think it’s just another New Work PR stunt of publicity seeking companies.

What is unlimited vacation

An employer grants its employees unlimited annual leave. There’s no limit, but also no obligation for taking days off.

In the perception of potential candidates, this offer sounds great. No pressure. You just go on vacation whenever and how long you like.

What do regulators say

In most countries around the world, there’s a minimum annual leave that employees are entitled to. The number of days differ significantly between geographies: North America is rather restrictive with mandatory leave, while Europe has quite high numbers of mandatory leave days.

Also the question of whether the employer actually has to enforce employees taking their leave differs from geographies. But in most cases, the employer has to ensure that their team takes time off.

Most regulatory environments know no restriction on additional time off.

What does reality say

Since this offer has become popular, there’s quite some data on what happens when such a policy is being introduced.

The reality us: People don’t take more days off. For a variety of reasons.

BUSINESS NEEDS COME FIRST

Usually, policies granting unlimited vacation come with some contingencies. The assigned work must still be completed, the boss must approve, and so on.

I don’t know about your workplace, but the time when all work is done rarely comes.

SOCIAL PRESSURE

Would you take 4 weeks off while your co-workers are busy at work? That wouldn’t feel right, would it. And this social pressure in fact does prevent people from making use of the policy.

UNDERUSE IS THE ACTUAL PROBLEM

Usually, the policies around taking as much time off as you like come with no restrictions in either direction. There’s no upper limit, but there’s also no minimum number you have to take. Beyond legal requirements of course.

In fact, what happens is that people operating under such policies usually don’t take more, but less days off than in traditional environments.

So much about being a great place to work.

What do I say

Unlimited time off is a marketing stunt. It’s en vogue in certain industries, and if you don’t offer it, you seem less attractive than the next best company.

But it’s not more than that. And be honest: If someone in your team took 100 days off, what would you make of that. I

If you really want to offer something attractive (and actually do good), go with the following solution.

  • Grant a generous vacation policy (say, 35 or 40 days) and make sure it’s being used. Check in mid-year and make sure everyone has planned their annual leave to be fully used at the end of the year.
  • Have felxible policies around parental leave or leave to care for family members
  • Work with flexible hours and a remote or hybrid setting.
  • Ensure your culture is results-driven rather than focusing on presence and time spent.

What people are actually looking for is the flexibility to make their work fit their lives. The above tools are enough to do that. And your team will be better off than with the shiny marketing gag that unlimited vacation is.

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We help you make sure everybody in your company knows what their role is, has the right processes and the best tools to deliver great outcomes consistently. Add a layer of excellent strategy execution and situative leadership and the success is yours.

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