What really happens when you offer unlimited leave

One Australian company offered employees unlimited leave. The result was surprising. Photo / 123RF

Like an all-you-can-eat buffet, "unlimited" leave can be deceptive.

From Netflix and Virgin to LinkedIn, Indeed and eHarmony, a growing number of corporations are embracing the concept as a way of boosting staff morale, attracting talent and avoiding burnout.

But when Amantha Imber introduced the policy at her Australian management consulting firm Inventium two years ago, "front of mind" was the knowledge that often unlimited leave can have the opposite intended effect.

In many cases, employees feel pressured into actually taking less leave than they did previously, leading to some criticism that it is used more as a marketing gimmick than a genuine offer.

"A big difference in terms of how we've done it is people still have the four weeks they're entitled to by law," Imber, author of The Innovation Formula, said.

"At a minimum I expect staff to still take four weeks. What is different is there's bonus leave on top, they can take however much they need. That was very different from how other organisations have done it."

Imber said she was "very conscious to role model it from the top" by taking at least five to six weeks of leave herself, and to "positively reinforce" people to take their "rebalance days" by discussing it during staff meetings and highlighting "what a great thing it was that this person was taking care of themselves".

She said it was important to consider how the policy would be implemented and labelled. Rather than a set of rules around its use, she decided to focus on intent — "to achieve balance in one's life".

So Imber called it "rebalance leave", to make it clear it was not replacing other kinds of leave with specific purposes such as parental leave, sick leave and carer's leave.

But she agreed that approach might not work in all workplaces. "I think in some cultures taking a lot of leave or sick leave can [be seen] as weakness," Imber said.

"Particularly in more masculine, alpha cultures, that's definitely a thing. At Inventium that is not an issue. People are really celebrated when they recognise that they're feeling tired or incredibly busy or not spending enough time with family."

Before the policy was introduced, Inventium's 15 staff were taking an average of 19 days per year. They now take an average of 27 days, or about five-and-a-half weeks. At the same time, average sick leave almost halved from 2.45 to 1.4 days per person, well below the Australian average of eight or nine.

Imber described that result as "almost unheard of in Australia".

"I get asked by a lot of people whether anyone has taken advantage of the policy, and the answer is no," she said. "That's because there's a high degree of trust and respect. It's been great for Inventium but I don't think it's for every business."

She said Inventium needed the policy due to the hectic nature of the work. "Typically consultants have a pretty hectic schedule, a lot of travel, fairly long hours," she said.

"Fundamentally I felt the way employment contracts were structured were pretty unfair. The hours we work are uncapped but leave is capped at four weeks. As a result of that imbalance we would have some consultants getting pretty worn out.

"I thought to even things up and bring more balance into my team's lives, we would not have a cap and instead have unlimited paid leave."

Imber argues unlimited leave could be considered in a lot of different industries. "Where it doesn't apply is where people get paid overtime, such as hospitality and retail," she said. "But in a lot of white-collar industries, people are paid for a 38-hour week."

Many workers hoard their annual leave, either with the intention of taking a big holiday, or to use as a buffer for when they change jobs. But as smartphones increasingly blur the line between work and home, Australians are working longer hours and getting "burnt out".

"I think a lot of people are simply exhausted," Imber said.