Would you ever trust employees enough to allow them to go off on holiday whenever they want? Turns out, you probably should.
These days, a company’s vacation scheme is very important to employees. A Deloitte report reveals that Millennials value a good work-life balance over most other aspects when considering a job. They want a life beyond work. It’s no wonder that employers are devising creative ways to offer vacation perks.
If you thought the ‘unlimited leave’ idea was stretching it far enough, brace yourself: the CEO of advertising firm SteelHouse, Mark Douglas, actually pays employees $2000 each to go on a holiday each year. No, he hasn’t gone bankrupt- in fact he claims it has helped boost the company’s growth! How does he manage that?
If you’re scratching your head and wondering how that works, we have a possible answer. Turns out there’s a lot of theory on how flexible vacation policies actually benefit a company. First, let’s have a look at why a flexible leave policy doesn’t harm an organization’s productivity. To understand this, let’s take the case of companies offering unlimited vacation to employees.
How does the concept of unbridled vacation sound to you? As a manager, possibly your first thought would be – with unlimited vacation, the employees would never ever turn up at office! They’d be on holiday everyday! That is nothing more than a myth. It’s actually proven by research.
Data proves this does not happen in reality. American company Kickstarter claimed that since the unlimited vacation policy was introduced, employees took even fewer days off! Kickstarter isn’t alone; American HR consultancy MammothHR also reported that its employees took far fewer holidays after the fixed leave policy was replace with unlimited vacation. The reason is simple: when given freedom, employees are far more responsible than we think they are! Instead of slacking off, they feel indebted to work even harder when treated well by employers. However, it’s important that employees take a break sometimes, or they may suffer burnout. This is why it makes sense that SteelHouse encourages its employees to go on holiday. Douglas claims employees get even more productive after a well-deserved break!
How financially viable is flexible leave policy?
The knee-jerk reaction to unlimited leave is to assume the company would immediately run into losses. However, this bit of information will give you a fresh perspective: In 2014, U.S. companies incurred $65.6 billion in accrued paid time off costs last year. In simple words, that means it’s costing the economy billions to pay for the accumulated leave that employees don’t use in a year. By offering unlimited leave (which means there’s no set minimum or maximum limit), companies are actually able to save the money that would otherwise be paid out to employees who didn’t use their available time off. It’s a no-brainer that unlimited leave could actually be a financial gain for the organization!
Secondly, in the hierarchy of Millennial needs, we know that work-life balance is one of the most important aspects. By offering leave flexibility, you’re sending a clear message to employees that their personal life is equally valued. Besides boosting employee engagement, it’s a great way to retain talent. As written in a Forbes publication, “If you’re an employee, it’s a great morale booster to know that your company trusts you enough to allow you that degree of freedom in determining when you work and when you don’t.”
Many successful companies have already recognised the positive impact that a great leave policy and can have. Companies which are already offering an unlimited leave policy include Buffer, LinkedIn, General Electric, Virgin Group and Netflix. LinkedIn’s chief human resource officer, Pat Wadors, explains why, “The purpose is to empower managers and employees.Employees are adults who don’t need to be micromanaged or wait to accrue vacation days after a designated period.”
Key takeaway: A flexible leave policy is the best way to offer the work-life balance that employees today value so much. It does not affect negatively affect the company’s profitability. In fact, your organization will become a highly attractive employer to Millennials. Flexible leave ideas include: unlimited vacation, remote working, or even paying employees to take a holiday!