How effective are unlimited leave policies? – Employee Benefits

In 2015, we implemented an unlimited holiday policy at Smarkets. At the time, being an up-and-coming tech start-up in London with 40 people, having such a benefit seemed attractive. It was a novel and purposeful idea to break through the noise and capture the best minds in a very competitive industry. Unlimited dates. All-you-can-eat buffet. Bottomless mimosas. Endless holidays. Sounds too good to be true. Because sadly for us it was.

First, what immediately happened was a need to earn or justify time off. People were going to great lengths to explain why they wanted to take leave and why they deserved it. When you have a quota per annum, you book your holiday because it is yours and there is no extra layer or political element to contend with. When you could take an endless amount, it was not so obvious what you should take, and you felt compelled to provide reasons.

What happened next could have been easily predicted: strong performers took too little; weak performers took too much. We ended up with A-players exhausted and C-players lying on a beach somewhere. This created a hidden resentment and an underlying feeling that the treatment was not equitable which led to more control over the number of days taken. And then, well, was it really unlimited?

Finally, we found such a policy did not scale well for a growth company. It was a distraction for the people team who were constantly figuring out edge cases and policing individuals who would book long holidays without appropriate cover. Line managers just were not sure what was ‘acceptable’ when a policy stated it was unlimited. Why shouldn’t John take four weeks off, every two months? This created a lot of back and forth and ambiguity.

In a post-pandemic world where employees are tailoring their work to suit their lifestyle, what is important to consider is the overall working ethos that you want to have as an [organisation]. Now more than ever, prospective candidates want to know about working hours, remote working policy, work-from-anywhere policy, sabbatical policy, and the wellness package. They are dutifully deciding where they can thrive, be themselves, and grow. And this is way more compelling and balanced than having a policy like an all-you-can-stomach holiday one that in the end will almost always leave you with either slight indigestion or the feeling that you did not make the most of it.

Céline Crawford is chief people officer at Smarkets

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