Unlimited Holidays: A HR department nightmare?

unlimited holidays

Over the last year we have seen a growing trend of companies developing ‘unlimited holidays’ policies, meaning no restrictions on holiday entitlement. This policy has the aim of increasing work life balance. However, does this lead to increased need for monitoring employee performances and systems to ensure productivity levels are kept, or if the scheme is being taking advantage by particular employees impacting business performance.

Large organisations are in the position to offer these benefits to employees helping them in the candidate-led market. Unfortunately, this leaves smaller organisations at a further disadvantage at attracting talented candidates, however, there is other incentives SME’s can offer which we have detail below.

Companies such as Dropbox and Eventbrite offer their employees unlimited holidays, the policy first appearing in America where there is no minimum annual leave requirement compared to the UK which has a minimum requirement since Working Time Regulations 1998. For example, LinkedIn have offered unlimited holidays to their US office since 2015 only and not their UK office due there already being a minimum requirement in the UK.

Unlimited holidays considerations

This policy is not straight forward, and many considerations are needed, including if a manager feels an employee is using the policy too much to their advantage, are they allowed to decline request on this basis? Due to absences impacting on the employee’s performance, rather than improving productivity.

Managers and HR departments should also monitor if employees not taking time off due to feeling guilty and anxious of judgement when taking time off. Poor company culture may be at play if employees feel judged utilising the scheme. Furthermore, considering if employees are trying to make up for additional annual leave by working longer hours or working over the weekend. This will have a negative impact on employee wellbeing and productivity.

Investing in management and monitoring tools may be necessary, helping HR departments to manage the new policy with ease. Including time management software, helping to establish if employees are maintaining or have increased work performances, due to higher job satisfaction.

Unlimited Holidays alternatives

The UK are trailing 4-day weeks, which could be a bigger advantage to employees and various departments for monitoring performance and time off. However, the employees pay can not be reduced if this is a new company policy being implemented.

Increasing the number of days given for annual leave and including all bank holidays, having an above average annual leave package can be a very attractive. This benefit could lead to attracting higher intellectual candidates, positively impacting business performance.

Executing a flexible working hours scheme can create a better work life balance. Empowering and trusting employees to work hours which fit with their lifestyle, rather than the other way around. This type of work scheme benefits employees who have families, this could reduce the need for childcare which is expensive; this scheme may improve employee retention rate.

Why this policy is a HR departments nightmare

The policy will not be easily written, using time and financial resources to ensure the policy safeguards the business as well as ensuring all legal requirements are covered i.e., UK minimum requirement for holidays. Other considerations include when and how can managers reject holiday requests, notice periods of longer holiday requests i.e. over 10 days of holidays.

If holidays are unlimited, are you happy with an employee taking a day off every week or taking a week every month? Considerations on the impact it might have on other employees as some may be inclined to not take advantage of the policy as much as others.

It can also be suggested that companies are implementing unlimited holidays as a PR stunt in the current candidate-led market, compared to companies considering the wellbeing of employees.

As further monitoring is required, HR departments may be come overwhelmed as well as increasing the amount of difficult conversations HR professionals are having with employees will negatively impact the department causing them to have lower job satisfaction.

A round up of our thoughts on unlimited holidays

  1. Increase in monitoring employees’ performance
  2. Impact on company culture – would employees feel they are being judged for taking holidays?
  3. Staff shortages, would there ever be a full team working?
  4. Implementing a minimum holiday allowance

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