How to make unlimited annual leave work

by Amantha Imber27 Sep 2016
Back in 2010, Netflix announced a new policy that made headlines around the world: it was giving all staff unlimited holiday leave.
Since this announcement was made, around 1% of companies in the United States have moved to offering similar policies, including Virgin Group and LinkedIn.
However, in Australia, unlimited paid leave remains largely absent from company policies.
In June this year, Australian innovation consultancy Inventium announced that it was offering all staff unlimited paid leave – with no strings attached.
The initiative sparked intense debate, ranging from how empowering and innovative the initiative was, through to people believing that staff would abuse the system. It was also called a “publicity stunt”.
For companies considering implementing an unlimited leave policy, there are several things to consider. Of course, it is certainly not one that would work in every organisation.
Do managers trust staff?
Having an unlimited leave policy places a lot of trust in employees.
It trusts them to do what is fair for themselves, for their team mates, and for the organisation they work for, as unlimited leave has implications for all three groups.
For organisations where suspicion or mistrust exists between management and staff, or where managers are frequently questioning staff behaviours and motives, an unlimited leave policy will only exacerbate these issues.
Therefore, it is important to first focus on building trust before considering an unlimited leave policy.
Label with care
For organisations considering implementing an unlimited policy, careful thought needs to go into how the policy is labelled. For example, “Unlimited Annual Leave” is an inappropriate title if there are numerous conditions placed on its implementation.
At Inventium, the leave policy is called “Rebalance leave”, as the intent is to help staff rebalance the demands of work while ensuring enough time off was taken to recharge and spend time with family.
Make it separate from other types of leave
Before introducing the unlimited leave policy at Inventium, we thought carefully about the intention of the policy and the definition of leave.
The company decided to keep it separate from other leave such as sick leave, maternity leave, study leave, and so on because the intent was focused around staff rebalancing after periods of intense working hours and not having to count or stock up leave days.
Organisations need to first consider their intention behind introducing an unlimited leave policy and design the parameters according to the intention.
Without careful thought and consideration, unlimited leave has the potential to go from being one of the best employee benefits a company can offer staff, to something that can do significant damage.
Dr Amantha Imber is the Founder of Inventium, Australia’s leading innovation consultancy. Her latest book, The Innovation Formula, tackles the topic of how organisations can create a culture where innovation thrives.