Unlimited leave: Does it really work?

Unlimited leave has come out of Silicon Valley and is starting to infiltrate Australia’s workplaces, particularly in the tech sector. But is it something that would work for your business? Or should you settle for the ‘old school’ approach of four weeks?

Are you ready to embrace the ultimate flexible working policy?

IIn the world of human resources, we know how important it is to manage annual leave. Leave makes employees happy and when employees are happy, they’re also more productive. So, just by keeping their spirits up, means you’ll have both a more efficient team and a more profitable business.  This is the main thinking behind unlimited leave. And it’s not even the only reason to consider introducing it.

Unlimited leave as a recruitment and retention tool

Proponents of unlimited leave argue it can be a great retention and recruitment tool. After all, the war for talent is very real in a range of industries. As an employer, there’s only so much salary you can use as a bargaining chip. By offering unlimited leave, you are setting yourself apart from other employers, giving staff something beyond salary to lure them. At the same time, your employees who grow accustomed to having no check on the amount of leave they can take may find it particularly hard reverting back to the traditional ways.

So, what are the downsides?

Before you introduce unlimited leave in your business, it’s worth considering how much you trust your employees. What is the likelihood of them abusing the policy?  There’s a good chance that there might someone in the organisation who will stretch it to its maximum (although, conversely, many employers may be surprised by how trustworthy their staff really are when given greater responsibility and freedom).
Then you need to flip it on its head – what if your employees take even less leave than they’re supposed to? This could leave staff burnout, ironically something an unlimited leave policy is trying to counter.

Where can unlimited leave assist businesses?

Unlimited leave tends to work well where employees are highly engaged, self-motivated and can take a long-term view of their role and career. It also works well in businesses where there could be periods of intense activity, followed by periods of downtime e.g. businesses that are seasonally focused. However, unlimited leave won’t work if the organisation is a hyper-competitive one. In these sorts of environments, taking leave can be seen as an impediment to their career progression. What you’ll tend to find, is employees avoiding taking leave and facing greater levels of stress, anxiety and ultimately burn out.

How to implement an effective unlimited leave policy

Implementing any kind of leave policy begins by setting the example yourself. You, as the business owner or manager, have to be prepared to be flexible and take time off. This seems difficult when you’ve got a business too run but if you don’t, no one else will take leave. However, you have to make it clear and explain that an unlimited leave policy doesn’t mean not showing up. There will still be processes people need to follow and should have to give you reasonable notice of their intention to take leave. Finally, you may need to tell your team that they need to be reasonable. They can’t necessarily take time off when they’re needed in the office. For instance, if you know that a particular month or week is going to be busy, you should make sure your staff are aware they need to be around.

And remember, keep a record

Even though you might not be counting your employees’ annual leave days for your own records, for legal and compliance reasons you’ll still need to be taking notes. After all, the 10 National Minimum Employment Standards, entitle every worker to four weeks of annual leave. These will still accrue this no matter what your employment contract with them says. If they take less than four weeks a year, you may find you owe them when they leave employment with you.

Are you ready to go unlimited?

An unlimited leave policy can work in the right circumstances. But knowing when and how to implement one is a challenge. If you’d like to find out whether your workplace could benefit from one and, if so, what it should look like, get in touch with Catalina Consultants team today