Unlimited paid annual leave gives employees the ability to take paid-time off whenever they need to. Unlike traditional annual leave policies, there’s no hard limit on the number of days or hours that employees can take off as long as their work is completed. Advantages to having this policy includes flexibility and time to pursue passions outside of work, as it is said that – “A happier employee is a more productive one.” – which in turn benefits the employer as well.
Some disagree with this policy claiming that companies use it as a marketing tool or the ambiguity it engenders for employees where they can feel uncertain about when and how much leave to take when policies and procedures are unclear. Additionally, some employees may find it hard to take leave if leaders or colleagues are not taking time off. On the flip side, some employees may get too comfortable taking time off which may put an unfair burden on their colleagues.
Two and a half years ago, we decided to experiment this policy at BrioHR. We wanted to give our employees flexibility and trust, so we gave them unlimited paid annual leave. We didn’t know what was going to happen but we were excited to find out. We found out a lot! Now we want to share those findings with you.
1. The company can save money
The company is able to make substantial savings by eliminating the need to pay for unused annual leave. For large companies this can save millions and may be the most compelling reason to consider unlimited annual leave.
2. There is far less HR admin
There is no need for the HR team to spend so much time trying to track and analyze leave applications, chasing documentation for medical leave or rushing employees to take leave before the end of year.
3. Attracting top talent becomes easier
Unlimited paid annual leave is an attractive perk and can help attract top tier talent. After implementing unlimited paid annual leave at BrioHR we saw our ‘offer accepted rate’ raise significantly. It is a really enticing bargaining chip, especially for start ups that can not compete on attractive financial perks.
4. It actually can increase productivity
By helping to eliminate employee burnout, unlimited paid annual leave can have a positive impact on productivity. Since implementing unlimited annual leave productivity increased and average, the amount of days that employees took leave did not increase vs when we had a limit.
5. The end of year ‘rush’ no longer happens
Many companies experience an end of year rush with employees desperate to use up all the paid leave they are entitled to before they lose it. This can result in many employees trying to take leave at the same time causing a drop in productivity.
6. Employee wellness increases
The freedom of unlimited paid annual leave helps employees to take time for themselves, rather than saving their paid leave for emergencies, chores etc. Giving employees the time to rest, rejuvenate and focus on health is a great way to increase employee wellness.
7. A great way to retain your employees
If you are used to having unlimited paid annual leave it’s hard to go back to having a limit. In today’s competitive employment markets, unlimited paid annual leave is a great competitive advantage and can help you retain top performing employees. BrioHR has certainly experienced extremely low attrition.
8. Don’t tell employees that you trust them…Show them
Trust is a fundamental value at BrioHR. We trust each other. Our behavior towards each other has grown that trust. Implementing unlimited paid annual leave is a great way for management to show employees that they trust them. Offering unlimited paid annual leave can boost trust levels and improve employee relations.
9. Creates a more collaborative culture
The flexibility of unlimited paid annual leave puts more responsibility in the hands of the employees. Taking the responsibility to plan your time off, scheduling with other team members and communicating with management to ensure that work still gets done. They trust AND responsibility breeds a more collaborative culture.
10. You have a built-in ‘early warning system’
So far, we have not had any employees at BrioHR abuse unlimited paid annual leave. But some companies that we work with see abuse of the system as an ‘early warning system’. Early warning that an employee is not as trustworthy as thought / is about to quit / (most importantly) has issues outside of work that they may need help with.