Is unlimited annual leave just a sticking plaster for burnout?

Although ostensibly attractive, an unlimited holiday policy requires careful planning to work effectively, as Amanda Lennon explains

Credit: Infidels Photo Agency

Investment bank Goldman Sachs has introduced a new policy allowing senior staff to take unlimited annual leave. Although unlimited leave is still fairly uncommon, a handful of businesses have gone down this route and Goldman Sachs joins well-known employers like LinkedIn, Bumble and Netflix in offering the perk.

It is easy to see why such a bold policy is appealing. In the war for talent, employers are trying to differentiate their offering and attract the best new recruits, while holding onto their own star performers. Is unlimited annual leave the golden bullet that will address the skills shortage many businesses are facing? It remains to be seen how the investment bank’s new policy works in practice, but in my view, it is unlikely to make much difference.

In a sector known for its long hours and pressure to perform, will employees feel able to use the benefit, or will they fear that being seen to take more time off than colleagues will count against them when it comes to promotions and development opportunities? Some smaller businesses that have trialled unlimited leave are now withdrawing it in favour of a more generous cap because it hasn’t worked: employees felt guilty at taking much more leave and therefore kept to an average in line with colleagues.

The BBC has reported on the findings of a survey of recent graduates who had joined Goldman Sachs. 13 employees were surveyed, and the results showed that they averaged 95 hours of work a week, sleeping for only five hours at night. All of the new recruits who responded to the survey said their job had negatively affected their relationships with friends and family, and 77 per cent confirmed they had been subjected to workplace abuse.

Goldman Sachs is trying to change things, and should be applauded for that, but turning around workplace culture and embedding a focus on wellbeing that makes a real difference takes a long time. Unlimited annual leave may make a great headline, but if it is being used as a sticking plaster to address burnout it is destined to fail. To properly address burnout, employers need to look at the root causes and address issues around their culture, working hours and how they resource the business.

On a practical level, organisations need to think carefully about how they would manage this kind of policy and how to resource the business if employees are taking more leave. If the result is that more pressure is being put on colleagues to cover for the absent employee, and then when they return, they are put under extra pressure to catch up, any benefit from their time off will be limited.

Who the policy applies to could also be an issue: the national media has reported that Goldman Sachs’ policy will only apply to senior members of staff. If unlimited leave is being introduced at senior levels only, it is likely to create resentment among other employees and create a ‘them and us’ divide which could quickly become toxic and impact on productivity.

Unlimited annual leave may sound great, and help to attract a few more applicants for vacancies, but to work effectively, it will require a great deal of careful thought and planning.

Amanda Lennon is an employment partner and HR & wellbeing director at Spencer West