The limits of ‘unlimited’ leave

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During the Memorial Day long weekend, many Americans will like to take advantage of the holiday on offer, spending the start of the summer season with friends and family. But when it comes to taking their leave rights, famously hard-working American employees are more reluctant. And the growing popularity of “unlimited leave” policies, especially among U.S. companies, appears to be having little effect on the number of vacation workers who actually take leave.

Stopping taking days off has been touted for several years as a potential boon to employee productivity and creativity. Netflix, while famous for its strenuous work culture, has long since proselytized for its no-holds-barred leave policy. Richard Branson, the British entrepreneur, promoted it in his Virgin Group. Since the start of the Covid pandemic, the idea has spread further. Goldman Sachs began offering its top bankers as much time off as they wanted in 2022. Companies like Microsoft and Roku have also introduced unlimited leave policies, in line with flexible post-pandemic labor standards and to attract new talent in a tight labor market.

The US seems to have a cultural bias towards work; paid leave is not a legal mandate, and Americans work more hours and take less vacation than their G7 counterparts. Many U.S. company leave policies have a “use it or lose it” clause: employees can take the paid time off they collect with each paycheck, but after a certain number of accrued hours their vacation days expire and often end when they take their receive wages. end of the year.

The aversion to losing earned vacation days has served as an important — but still insufficient — brake on America’s work instincts. According to the Pew Research Center, 48 percent of Americans take all their allotted vacation days.

But the same psychology can lead to unexpected effects when it comes to unlimited vacation plans. Research from Namely, an HR firm, found that U.S. workers under such policies after the pandemic, despite their additional freedom, took only a fraction more vacation than workers with limited paid time off. Anecdotal evidence suggests that in many hard-working companies without fixed holiday entitlements, employees fear that taking days off will come across as selfish or lazy, or will harm their career progression.

Americans may disdain their more vacation-loving European counterparts and attribute American economic dynamism in part to their work ethic. But numerous studies highlight the benefits of adequate time away from work, including better mental and physical health and productivity. Leave is also important for society. Burnout, exacerbated by successive shifts during the pandemic, has forced doctors and nurses to leave health care systems in the US and elsewhere. Requiring financial services workers to take holiday when handing over their responsibilities to someone else is seen as a way to prevent ‘rogue’ trading incidents.

Of course, some companies have secretly suspected all along that the unlimited paid leave policy would prove to be self-limiting. But if companies want them to function as billed, bosses can model good behavior by taking more time off themselves and encouraging their employees to do the same. Mandating a minimum number of days off, within an unlimited framework, can help remove the stigma surrounding taking time-out.

Innovative human resources policies, aimed at getting the best out of employees and improving work-life balance, should be encouraged. But they need to be revised and dumped if they do not achieve the desired intention.

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