More companies offer unlimited paid leave, but many employees don’t use it in the end

In addition to being a game changer for entertainment, Netflix was also a pioneer in human resource strategies. As part of its strategy to attract the best talent, the company introduced an unlimited paid holiday policy in 2003 after it went public.

Since then, other companies such as Sony, Evernote and LinkedIn have begun adopting versions of their policies.

Goldman Sachs has jumped into the latest bandwagon, announcing in May that senior staff will be able to take unlimited paid leave.

From a Singapore lens, such corporate benefits seem almost too good to be true.

Workers under the Singapore Employment Act are entitled to a minimum of seven days’ annual leave if they work for at least three months as their employer.

An additional day is added for full service each year but entitlements are limited to 14 days.

Many companies are dish out in contrast to the infinite number of holidays. What is there to offer unlimited vacations for them?

Sometimes this can be due to very realistic reasons of administration.

Netflix initially had a standard leave quota but operated an honorary arrangement, where employees could take leave as needed after notifying their managers.

But when the company was listed, the auditors fell into one shake-up and forced employees to leave.

To avoid the need for a formal tracking process, Netflix has instead offered an unlimited paid leave policy.

Only high-paying job seekers are no longer satisfied

But for companies like Goldman Sachs, the reason may be stuffing-related because companies are fighting to fill seats after the Great Recession Wave. Job seekers are no longer willing to work 100 hours per week just to check a banker’s hefty salary.

Companies in such high-pressure sectors may not significantly reduce the heavy workload that comes with work, but may introduce other benefits, such as unlimited unpaid leave.

The same is happening in Singapore. According to employer Randstad, half of all Singapore employees will receive a bonus in 2022. But another study found that one in three was considering a change of employer in the first half of 2022.

The top three motivations for employees who have already changed jobs were career balance (64 percent), pay and employee benefits (63 percent) and a pleasant work environment (51 percent).

Unlimited unpaid leave is not only possible in the United States – local companies have also embraced it, such as public relations firm SYNC PR in 2019 and web design firm Fixx Digital in 2015.

SYNC PR shared with me that its main purpose is to build trust with employees by controlling their leave, giving them the responsibility to work efficiently and manage their time. It also reduces administrative headaches, especially if holiday orders vary from country to country.

Most importantly, unlimited unpaid leave helps attract good workers to a competitive market, which was a struggle for the PR industry.

The increase in SYNC PR’s three to 25 employees over a three-year period is a strong indicator that it is working for them.

(Photo: iStock)

When unlimited leave is abused, or not taken

But there are some drawbacks when an unlimited paid vacation policy becomes free for all. Employees may deliberately misuse the system to take time off to avoid deadlines or crises.

To ensure that teams are fully present when it comes to work, a Singapore company limits employees to taking leave in the first month of each quarter.

Others face the opposite problem of not using the employee policy. Local media company SGAG implemented an implementation in 2015 to promote work-life balance, but employees were concerned about creating the idea of ​​co-workers making coverage for them or relaxing and therefore refrained from taking leave.

The company eventually returned to the 21-day annual leave proposal.

The San Francisco start-up buffer faced the same problem in 2017 when employees took only five to 10 days off annually after the unlimited paid leave policy was introduced. The company then added an element that required all employees to take at least three weeks off each year.

The managers had to use those three weeks and as a result, led by example.

Would you consider a company with an unlimited leave policy?

A topic discussed among corporate leaders from epidemics with mental well-being, will more companies offer unlimited paid leave, letting working professionals decide for themselves how much time they need individually to recharge them?

As evidenced by the company’s experience, it works for some and not for others. Some have gone back to the old ways because the results have been bad.

Whether an unlimited paid leave policy works well depends on the mobility of a team. If the boss is a claimant workaholic, no employee will dare to apply for leave. A culture of encouraging rest is crucial.

Most importantly, it’s not just about the amount of annual leave, but about quality. Will employees be committed to complete disconnection on their holidays and can managers respect it?

(Photo: iStock)

A few years ago when I was on a corporate job, I had to bring my laptop on a week-long family trip to Taiwan. I spent a few nights working on spreadsheets while my wife and kids had dinner through room service.

By contrast, a former colleague of mine from Germany embarked on a 45-day cruise around Europe. It was agreed that he would be completely unreachable and the company would only have to work around it.

Until we learn to be completely detached from work (and realize that the sky will not fall from it), the number of vacations can be important because we are just running away from the office – but we are not running away from our work.

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