Should limited holiday allowances be a thing of the past?

In recent years, everything people thought they knew about the way businesses are supposed to run has changed. Technological advancements have, in some cases, done away with the traditional office completely, while a shift to self-care has shone a spotlight on the way employers interact with their employees.

And one way the modern day business has changed is through the handing out of holidays. For decades, the general rule of thumb has been to allow for employees a set number of days off per year. However, nowadays, big brands like Netflix are doing things differently, with surprisingly promising results.

Netflix has proven that not only can unlimited holidays work, but they could actually be the smarter choice

Netflix, which has been named one of the world’s best employers by Forbes, is now offering its employees unlimited holidays.

The policy is this: salaried staff members can take as much time off as they like over the year. Their days off aren’t tracked, so it’s up to them to decide how much time they want to take off.

For employees, this can be a tempting prospect. Having control of your time off is thought to make team members happier, creating a better work–life balance and offering more flexibility.

But, perhaps somewhat surprisingly, unlimited holidays can also be a beneficial initiative for employers. While many entrepreneurs may fear that team members will simply disappear for stretches of time without explanation, the experiences of brands like Netflix show that unlimited time off can actually make staff more productive. By reducing stress, employers can attract and retain skilled workers.

It also introduces an element of trust into the business, which creates a sense of mutual respect between employer and employee. This helps to foster a more positive working environment overall.

However, unlimited holidays may not be the right choice for everyone

Despite holding many potential benefits for businesses, there are also several factors involved in the idea of unlimited holidays which require careful consideration.

For one, some companies have found that far from reducing the amount of stress experienced by employees, providing unlimited holidays can cause anxiety surrounding the feeling of booking too much time off, or taking advantage of the system.

This was the case for software firm CharlieHR, which offered employees unlimited fully-paid holidays when it started in 2015, but later scrapped the idea. One key reason for this was, according to co-founder Ben Gateley, that it was actually causing team members to take less time off.

Gateley explained: “If you are given 25 days holiday that are yours to take, then you are subconsciously motivated to take them […] Whereas the lack of number – the very concept of unlimited – potentially meant you didn’t value that holiday time in the same way.”

Final thoughts

There are positive and negative aspects attached to the idea of unlimited holidays. On one hand, when holiday allowance is too flexible, staff can feel uncomfortable about having total control and may end up using less holiday as a result.

On the other hand, bringing some level of flexibility to your holiday allowance does give employees the chance to work their role around their needs more successfully. It can provide a feeling of mutual trust which improves the workplace atmosphere overall.

The level of flexibility you provide within your business when it comes to holiday allowance really depends on the business itself. Only you know how your organisation works best, but whatever option you choose, it needs to be one which has been thoroughly considered with the input of your team.

Are you looking to get your business off the ground? TEDCO Business Support can help. Get in touch with our team today to find out what we can do for you. Simply call us on 0191 516 61 02 or email us at hello@tedco.org.

What we offer

TEDCO offers one-on-one support provided by a dedicated team of business advisors and a range of pre start seminars available to clients who are taking the first steps into self-employment. This could be looking at an initial idea and developing it further, looking at how to start a business plan, business competitors, business marketing.

Are you eligible?

If you are looking to start and grow a business we’d love to hear from you. Our friendly team of experienced Business Advisors are on hand to take your call to discuss the support available.

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