Unlimited holiday: A perk that comes with pitfalls

Unlimited paid holiday may sound too good to be true but there are fears this new trend could do more harm than good.

"I'd love to say it was about productivity or ownership or autonomy but the reality is that we… had seen some companies doing it in America and thought 'why not do that ourselves?'"

Ben Gately, chief operating officer at software firm CharlieHR, was at the forefront of a new trend when he rolled out unlimited holiday to his UK-based staff seven years ago.

Unlimited paid holiday is an increasingly common perk in the US and tech firms in particular have using it to attract and retain employees.

And recruitment websites in the UK say there's a small but steady growth in the number of British businesses importing this US trend.

Jobs board Reed saw a 20% increase in jobs offering unlimited paid leave between 2017 and 2018, while TotalJobs and Jobsite told Wake Up To Money they had seen a 10% increase year on year.

This latest American import doesn't work for everyone. Ben says unlimited holiday didn't work for his firm and he ended up cancelling the perk in favour of alternative benefits such as more flexible working hours.

But the interest in this new way of managing time off continues to rise.

'Increased productivity'

Frankie Parkinson, from the Manchester-based firm Gradtouch, says they gave staff unlimited holiday as part of their drive to have a truly flexible working policy. Last year, she personally took just over 30 days leave.

"As long as everyone is performing and the business is doing well, it's absolutely fine to go on holiday as and when you wish," she says.

"We see increased productivity, we see people progressing more quickly than they would typically because everyone has so much trust and so much responsibility. People buy into the goals we set because they have that flexibility and because we place that trust in them."

Rosie Haslem, director at the architecture firm Spacelab, agrees with Frankie about the benefits of staff taking time off: "Work is just one part of life - but in the design industry, this can be a big part, with people often having to work long hours.

"So we have uncapped annual leave which enables our team to take the time out that they need, to relax and recharge. The flexibility has led to a more empowered workforce, who are happier and more productive when they are at work."

While those firms have found it works well, it's not always so clear cut. Perhaps surprisingly, with some businesses it failed not because workers took too much holiday but because they didn't take enough.

'Huge amount of anxiety'

For CharlieHR staff, unlimited paid leave wasn't so much a perk as a pitfall.

"People didn't take enough [holiday]," explains Ben Gately. "People are pretty bad at taking holiday, we're all scared to do it because we have to do our handovers and pass stuff over and meet deadlines and so we actually saw a reduction in the amount of holiday people were taking.

"There's a huge amount of anxiety about not knowing the limit. A bunch of our team came to us and said: 'Actually we'd love to know where the line is. Is it okay to take 35 days? Is it okay to take 25 days? Where should I draw the line?' Because the reality is that it's not actually unlimited."

Unlimited leave didn't work out for staff at CharlieHR says Ben Gately

Joe Wiggins is career trends spokesperson at the jobs website Glassdoor, a company that gives its US employees unlimited paid holiday but not those in the UK. He agrees that unlimited holiday can actually be very constrained by workplace demands.

He says: "In the San Francisco Bay Area it's a common perk. But unlimited holiday doesn't necessarily mean lots of people take lots of time off.

"It's more common in companies with clear goals and metrics, and sometimes it can be hard to take time off in those environments. So for a lot of people unlimited holiday is probably not what it says on the tin."

More businesses are experimenting with flexible working arrangements as they try to find what works best for their workforce. So the limitations of unlimited holiday could soon be more widely tested.