Unlimited Annual Leave: opinions?

Unlimited Annual Leave: opinions?

 16 Jun 2022

“Goldman Sachs will allow senior staff to take an unlimited number of annual leave days, the latest move by a Wall Street bank to retain talent in a heated job market”. Headlines from N Business recently touched on the new HR trend that’s been the hot topic on LinkedIn this past month. With the topic of unlimited annual leave being so current, this week we decided to take a look at its pros and cons: how many days off a year are too many; is the new scheme increasing productivity; and are people actually utilising this new approach - or has it had the opposite effect?  
What I personally found surprising was that unlimited annual leave has been around for some time: Virgin, for example, have offered the scheme to their senior managers since 2014. When introducing this new initiative almost a decade ago, Sir Richard Branson explained that "It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel a 100 per cent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business - or, for that matter, their careers’.
This is the key issue, and the argument that I’ve seen floating about on LinkedIn for the past month. How much time off is too much time off? The fact that the scheme is primarily being offered to more senior members of staff, means that it’s most likely they will have high workloads and be operating in high pressure environments. Such staff might actually be inclined to take less time off than before, to avoid running the risk of falling behind on their workload, resulting in developing a company culture of presenteeism. A 2017 study by HR platform ‘Namely’ found that employees at firms with open-ended holiday allowances typically ended up taking fewer days off a year than under traditional systems. In addition, the fact that most companies offering the scheme are only offering it to more senior employees, brings its own unique challenges. Bloomberg recently released a company statement, detailing that partners and managing directors at the New York investment bank can take time off when needed “without a fixed vacation day entitlement”. However, as with Goldman’s, junior employees at the bank will only be offered an additional two days off per year, creating a distinct divide between senior and junior members of staff, and fostering an ‘us vs them’ mentality, which is unhealthy in any workplace.
Next there’s the question of a hidden agenda behind the introduction of the scheme. Veehtahl Eilat-Raichel, cofounder of Sorbet, a firm that buys unused vacation days from companies and puts the cash value on prepaid cards, told The New York Times that such a move was ‘completely driven by financials’, with companies in the past having to pay their employees for vacation days that they hadn’t used, but the new guidance no longer requiring certain companies to compensate employees for unused vacation time below a certain threshold, due to the fact that employees were technically not accumulating ‘vacation days’. Whether this has played a part in motivating certain companies to implement the policy, however, is open to interpretation.
Despite this, I can’t deny having slight pangs of jealousy when first seeing the idea pop up on my LinkedIn feed. If the scheme were successful, and employees used it to their own benefit, for any employee, it certainly sounds appealing, but for some it could have a dramatic difference on health and wellbeing. At Goldman’s in particular, the introduction of the scheme comes after reports of analysts complaining of 100-hour work weeks and declining physical and mental health. That echoed across Wall Street, with firms vowing to do more to improve the work-life balance of their staff. It’s an attractive move, at a time when competition to retain employees and attract new talent has intensified (as recruiters, we recognise this more than ever!) And, as confirmation of its popularity, a recent job board showed that positions offering the scheme had increased by 20% over the past year. A boost in workplace morale, heightened productivity, and a higher number of applicants for new job posts, are just some benefits companies have reported since implementing the initiative.
In the post-covid workplace, employees are recognising the importance of a work-life balance now more than ever. Could unlimited annual leave be the answer, or is there a more viable solution out there? Personally, I’m very pro the four-day working week pilot programme, that began trialling at the beginning of the month, concluding in December, and has more than 70 UK companies onboard. Knowing that my colleagues are all off at the same time would reduce that feeling of guilt, and stress that I should be working. And let’s face it, wouldn’t a four-day working week be the dream?! Let us know your thoughts…

 

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