Even after my most stressful days at work, I find myself on Twitter arguing with people I disagree with about how to build businesses (I steer clear of almost every other type of argument on Twitter).
I don’t know why, but there are some topics that really get me going. One such topic is Unlimited Holiday.
In recent years, there’s been a lot of discussion around the concept of “unlimited” holiday policies. For some people, the idea of unlimited holidays sounds like a dream come true. For others, it seems like a recipe for disaster. I’ve heard every argument against unlimited holiday…from “it’s daylight robbery!” to “it’s impossible to administrate.”
My good mate Ben Gately, CEO of CharlieHR, wrote a blog post which I have been sent in many such twitter scuffles. And you know what? Who I am to tell Ben and the team that they are wrong? He is right — it didn’t work for them.
The implication, however, is that it cannot work for anyone — and that is where I disagree with the critics who say that, “Unlimited Holiday is, and can only be, a mechanism for a company to ultimately rob you of holidays, unleash a world of bias and favoritism, and create a vacuum of total ambiguity.”
But, first — what is Unlimited Holiday? Well, different companies implement it in different ways, but the common trait is that Holiday Days capable of being approved and paid (crucially) are, at least in theory, unlimited.
Could someone, therefore, take their entire work year as Holiday? Well, I suppose that’s what I want to talk to you about. Because the hate and the love towards Unlimited Holiday, like any policy, is born in the details of the implementation.
What’s in a name?
I think one of the more positive changes made by team ‘PRO Unlimited Holiday’ has been to move away from the word Unlimited. Words like Flexible, Uncapped, or Minimum are a much less confusing word choice, and I personally prefer “Uncapped.” The trouble with using “Unlimited” is that you’re immediately drawing attention to one of the more difficult elements of the policy, but not the one which is actually the most beneficial.
The key draw to unlimited holiday is not actually that it is “unlimited” it is that you will not be penalized when you hit a statutory cap. You don’t need to dip into unpaid leave, as long as your holiday is approved. Using a word like Uncapped or Flexible, therefore highlights the actual benefit, while limiting confusion a little. Hey, it’s not perfect, but we have to remember that the only metric by which to measure success is not “how easy is it to understand by title alone”.
Uncapped holiday in action
At Whereby, I implemented Uncapped Holiday. I think it works quite well. One of our biggest challenges is often explaining exactly how it works to people who aren’t used to this kind of approach, which means both managers and employees. But, just because something is hard and requires some additional work, doesn’t mean it’s not worth doing. Further to our success, Whereby are a fully remote and hours-agnostic business, an approach which operationally leads itself to Uncapped Holiday due to legal complexities, management burden, and administrative capacity. If we have employees in France, Germany, the UK, the US, etc — how do we offer the same Holiday entitlement effectively? Uncapped holiday helps us solve that problem in a way which is really effective at scale.
Why make it work?
Why do I think this policy is worth the pain? This shift in thinking can help improve communication and collaboration between managers and employees, leading to a more positive work environment overall.
Build trust and accountability
My favourite paragraph of Ben’s post is a really poignant way to describe the approach to trust we take at Whereby:
There’s also an empowerment aspect to this. That wasn’t immediately obvious to us from the start, but it became clearer as time went on — extending this amount of trust to our team invited them to take ownership of the company’s future. It made it clear that Charlie wasn’t just their employer, but something they were responsible for taking care of.
At Whereby, one of our values is to Trust Trust. This means we trust by default, assuming best intentions and giving people space and freedom from day one, not asking each other to earn it. It doesn’t mean we stop paying attention. If things go wrong, we work together openly to reset expectations and re-align around shared goals.
Trusting Trust is an absolutely necessary ingredient in the kind of company we are building: distributed, hours-agnostic, and non-hierarchical. For some, it sounds oddly radical, given the business cultures many of us have experienced. But when you truly trust people and get out of their way, something wonderful happens: they thrive. And we’ve learned to trust this way of working because, well, it works. We are against micro-management of any kind.
However, this approach requires nurturing. There are regular moments of ambiguity, or even negative behaviour that can form where there is ambiguous or open guidance or communication. In fact, being trusted completely can cause some people to be cautious about asking for help at all, something critics of Unlimited Holiday frequently raise. Context can be lost, communication can falter.
At Whereby trust is the place we collectively try to bring each other back to. This means, our aim for Unlimited Holiday is from a place of:
- Trusting Trust and seeing our team as adults,
- Hiring people who specifically subscribe to this mindset and are comfortable with the double-edged sword of flexibility (more on that later), and
- Consistently building a culture where ambiguity, autonomy, self-direction, and distributed and async comms are the norm.
If that does not sound like something you want to commit to, or will struggle to implement: Uncapped Holiday may not be for you. You have to build a culture which holds trust and accountability centre to everything you do — and then build systems around it. Simply implementing Uncapped Holiday in isolation ain’t it, fam.
Value people’s lives
One of the biggest benefits of unlimited vacation is the increased flexibility it affords employees. With traditional vacation policies, employees are often reluctant to take all of their allotted days off because they don’t want to accrue too much time or dip into unpaid leave in case of emergency.
With uncapped vacation, our team can take off as much time as they need without having to worry about these things. You have to suddenly help your brother move house next week? Your Son is home sick? You study and need some time to catch up? Sure. Your life is important, and valuing that as a workplace reduces the chances of you having extra stress, complications, and poor performance impact your day to day role.
This increased flexibility leads to happier, healthier, and more productive team members. Additionally, it allows employees to take advantage of last-minute travel deals, take time off during stressful situations (avoiding further sick and mental health days), and other opportunities that might arise outside of traditional vacation times.
This does mean you need managers to be able to appropriately resource plan, and have systems in place for getting forward-looking holiday booked effectively and ahead of time. Your People Team have to think strategically about how to remind, communicate, encourage holiday booking wherever they can — and your managers need to be proactively thinking of their team in terms of resource planning. This is undoubtably harder than slapping someone’s hand and stopping them from taking leave, but this is the kind of work that moves your People Ops team from the administrative to the strategic.
Life is easier
Another benefit of unlimited vacation is that it simplifies global administration. With traditional vacation policies, each country has its own set of rules and regulations regarding vacation and holiday time. This can lead to confusion and frustration for both employees and HR professionals charged with managing these types of policies.
With unlimited vacation, there is only one policy to manage — regardless of where employees are located in the world. This makes it easier for People Ops and Management to administer and helps to avoid any potential compliance issues that could arise from misunderstandings about local laws and regulations. If the team and individual performance can permit the holiday, it’s approved. No need for your managers to remember the laws of Spain, California, and Nigeria.
Avoid the pit holes
OK, now we’re in the meaty part. It’s not easy to avoid the complaints without staring them down and accepting you need to rise to the challenge. Avoiding the pit holes in Unlimited Holiday, means being a high-functioning People team.
This is probably the most table-stakes element of a well implemented policy. Ensure there are minimum entitlements that your team accrue and must use. Any over-accrual should be paid out to them on exit. I also prefer underutilization to expire over a calendar year, this ensures that folks aren’t underusing and burning out in order to save the cash.
One of the biggest complaints I hear is that companies offer Unlimited Leave, discourage you from taking it, and then won’t pay any entitlement back on exit. If that’s the case, that’s shitty. Avoid the optics and make sure your policy is fair to all by ensuring a minimum for team comfort and guidelines.
I suggest starting with the EU minimum of 28 days (including bank holidays and public holidays).
Hire for people who index high on trust
When hiring, ensure there is a clear competency focus on giving and recieving accountability. This is something you should measure your team for (are they able to handle the trust and accountability) but also your managers (can they effectively manage in a high-ambiguity environment).
The way we do this at Whereby is by asking pointed questions around handling ambiguity, managing a flexible team, and enabling psychological safety.
- How do you practically create a culture of communication which doesn’t rely on micro-management, but allows you to manage upwards (and downwards)?
- If you are given data or information that contradicts your gut feelings and previous experiences, how do you react?
- Tell me about a work incident when you were totally honest, despite a potential risk or downside for the honesty.
- Under what circumstances have you found it justifiable to micromanage?
Provide a mechanism for resource planning
Your role as a People Operations team is to build tools and resources for your managers to use and run their functions effectively. Enabling them to resource plan is a large part of that. This means:
- An accurate and effectively-used HRIS system,
- Simple dashboards and visuals on their teams projected absences,
- Clear communications with the business on when to book upcoming leave,
- Systems in place which encourage the team to book holiday ahead of time and enable managers to effectively resource plan.
That’s the job of the People Team. Building these tools to help managers look ahead, resource plan, and trust the data they’re using to set expectations and outputs. The odd emergency day off, sick day, or sudden holiday may happen from time to time, but Unlimited holiday should not be used as a shadowy excuse for sloppy resource planning.
Provide a mechanism for performance management
Do not, DO NOT report over use to managers. Uncapped holiday makes the bold statement that performance is not about the hours at your desk. Hours at work is, absolutely, a part of working effectively, but it is not the whole story.
My People Team shares a report of under use, but never “over use”. Why? Because their performance is the leading indicator — not the holiday taken. A manager may come and say, “It feels they’ve been more absent than they should, and their performance is hurting” but that is different to “Your performance is fine but you’re away too often”.
Write very, very clear guidelines
Remote work has done wonders for well written documentation. If your documentation is unclear or verbose, it’s unusable.
- How to book holiday?
- When to book holiday (do you need 2 days notice for each day?)
- How do you treat public holidays?
- How are holidays paid out if someone leaves?
- Include some case studies for easy understanding
Then, sit with people. Do user research. Ask your team, “Does this make sense? Read back to me what you think this paragraph is saying.” Do the work to make sure the things your building are actually fit for purpose.
I’ve also found that Uncapped Holiday needs manager tools, it’s not simply managed by explaining to your team how to use it. This means building some advice around resource planning, rejecting holiday, measuring performance, what happens if they see concerning absences etc. A simple FAQ document should work well.
It’s just, like, my opinion, man…
Overall, I believe that the benefits of unlimited vacation outweigh the challenges. That said, I think the way your entire business thinks about performance, accountability, and delivery needs to change. You must be a higher-threshold employer, and a much more strategic People Operations team, in order to effectively implement it at scale.
If you’re considering implementing this type of policy in your workplace, I recommend doing so with some guidelines in place — such as minimum holiday thresholds, performance output guidelines, public holiday guidelines — and with management support in place to ensure smooth implementation and enforcement.
More than that, I suggest People Operations teams begin challenging themselves about what may work for their business using first principles thinking. Just because something worked for me, or didn’t work for CharlieHR, doesn’t mean you should CTRL + C & CTRL + V.
Until then, happy Twitter Fighting!