2021 – The Year of the (Unlimited) Holiday?

Holiday

The gardens of Britain have never looked better, probably. As 2020 comes to a close with hopeful news of an end to the coronavirus pandemic in sight, many workers will be eyeing up 2021 as the year to have a holiday beyond a ten-mile radius of their homes. There is likely to be enough pent-up air miles to go to the moon and back. Employers, on the other hand, will, we expect, see 2021 as a year to get things moving again, give or take the odd Brexit, that is!

Be that as it may, 2021 offers the possibility of a ‘reset’, an opportunity to implement change and maximise opportunities. Changing how one’s workforce is managed and incentivised is one such opportunity.

There has been a general rise in the awareness and implementation of ‘unlimited holidays’ as a contractual benefit within various types of organisations globally however it is not necessarily a new thing nor simply one for start-ups with 5 or fewer staff. There are reports that IBM introduced it in the 1990s and yet it has never become mainstream. 2021, then, as we get back to normal, could be the year. Below we set out our thoughts as to the pro’s and con’s every employer should consider.

What are ‘unlimited holidays’?

‘Unlimited holidays’ are the recognition that employees can take as many ‘holidays’ as they wish, so long as they continue to get the job done. Therefore, there is no maximum (or minimum) amount of leave an employee is eligible to take. The health warning, of course, is that the Working Time Regulations provide for all workers to have a minimum of 5.6 weeks’ paid leave per year.

What are the benefits?

The reason why an employer would consider implementing such a policy would be because their company and workforce offer a high economic output without ‘presenteeism’ (sticking around at work simply to be seen to do so). Such a workplace operates on trust, self-accountability, and shared goals.

Workers will likely fall into two camps: those that always take their maximum annual leave entitlement and those that rarely or never do. Having a prescribed number of days does creates some agony in decision making, as employees juggle career advancement, children, and life experiences. Implementing an ‘unlimited holidays’ policy, in tandem with remote working (which appears here to stay, at least to some extent) can help the work-life balance significantly, creating happier and more loyal employees. Naturally, it could also attract extremely high-quality talent.

What are the potential downsides?

Continuing on the topic of a highly engaged, trusting, and self-motivated workforce the question every executive team should ask is: is that yours?

Certainly, high-performers whose personal ambitions are aligned with the company’s are unlikely to be utilising their full allocation (if there is one). So they may not change their average holiday usage regardless if it moves from a limited to an unlimited scenario. Interestingly, however, a former advocate of the policy has indicated that having a prescribed limit on annual leave creates a high desire to use up the leave, whereas removal of the limit does not. As recognised by the Working Time Directive and the Working Time Regulations which were brought in to implement it, rest and recuperation are essential for any human being: as such, for some, there must be a positive obligation to take annual leave or face burnout in the alternative. For others, the existence of an abundance of leave could be too tempting and they may end up like small children in the proverbial sweet shop. High productivity relies on staff motivated to work not on staff motivated to play.

Furthermore, if there is a disparity between the time taken off between team members (regardless of individual performance (although it is obviously a consideration)) then resentment can build up if there appears to be no distinction in reward, appreciation, or any recognition-based review. For example, client/consumer-facing roles may find it more difficult to increase their time off whilst maintaining good or better performance. Why am I working so much for so little more than them? is toxic to any team and has a ripple effect. After coming through 2020, together, there is a very real threat to the disintegration of shared ownership and purpose-built up over the preceding months.

Nothing in life is without boundaries, so there has to be awareness of ‘how much is too much?’ In order for unlimited holidays to work, there has to be some internal guidance for staff to guard against unintended commercial implications as well as abuse. In addition, there must remain a mechanism to deny holiday requests: the “how?” is personal to each company.

Furthermore, with the very real commercial need for maximum output/efficiency in 2021, many employers are likely to be unwilling to allow any additional time away from the business, especially if staff has been furloughed over the preceding months. Whilst they are unable to remove statutory holiday entitlement, even in respect of furloughed staff, businesses will be unlikely to be particularly accommodating of additional leave may be less flexible regarding when holidays may be taken.

Consideration would also need to be given to managerial matters such as supervision of junior staff – adequate management will be necessary irrespective of unlimited holiday entitlement. The regime is likely to have its limitations, irrespective of its moniker.

Is it worth the hassle?

Taking all of the aforementioned considerations into account, is it worth it? Ask any high-performer what sort of incentive(s) they would want and it would be unlikely to be extra holidays, although possibly to genuinely get their holidays when taken, such that they can leave the mobile/laptop etc. at home might be seen as worth having. Therefore, is the policy benefiting those performing below par, in which case is the company paying the price in terms of productivity and failing to reward adequately those who are delivering the most?

What are other options?

As already mentioned, ‘unlimited holidays’ is not necessarily a new innovation, however, suited to the times it may be thought to be. Similarly, there are well-known workplace policies that have been implemented far more widely and may be more suitable and effective.

If ‘unlimited holidays’ are considered, but ultimately found to be non-optimal, then possible substitutes include:

Flexitime: giving flexibility over where, when, and the hours people work. The CIPD believes that flexible working practices should be “the norm – not the exception” and have prepared a ‘CIPD Viewpoint’ extolling the virtues of flexible working. This, in tandem with remote working, would allow employees to plan holidays with loved ones whereby additional days away can be planned around usual working timelines.

Remote working: If an employee spends all day on the phone or the computer and their interactions are adequately recorded, is there any reason they should be in an office? Especially if this has been the norm for the past few months.

To implement these would simply require an update as to the employment considerations (contracts, policies and processes) required to facilitate and supervise such a workforce going forward.

Further comment

Rooney Nimmo has been advising owners and senior management teams throughout 2020 and the uncertainty of the coronavirus pandemic. 2021 offers hope for a return to forward-thinking plans and strategies. The workforce is a key part of any strategy to capture the opportunities of 2021 and beyond. Rooney Nimmo can help owners and senior management teams navigate the uncharted waters. If you need help, please contact Dawn Robertson – dawn.robertson@rooneynimmo.co.uk.

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