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What is unlimited annual leave, and which companies offer it?

You've heard the term: but what does it mean, and how does it all work?

25th Apr 2024

Unlike most companies, which typically set a number of days which employees are entitled to take off as paid leave each year, companies with an unlimited annual leave policy do not restrict the number of days which their employees can take as holiday. In theory, this means that as long as an employee's work is getting done to a high standard, they are allowed to take as much holiday as they like without worrying about how those days add up. You might also hear this policy referred to as 'unlimited holiday' or 'unlimited vacation', depending on where in the world you are.

Is unlimited annual leave a good company benefit?

Like most benefits offered by workplaces, unlimited annual leave can have its challenges when it comes to rollout and adoption across a company. But if it has been implemented thoughtfully, communicated clearly, and used correctly, it can be an amazing employee offering that sets companies apart from their competitors. So, what are the benefits of unlimited annual leave policies?

Boosting productivity levelsĀ 

Many bosses with reservations about rolling out unlimited annual leave are concerned that by allowing employees to take as much holiday as they like, efficiency will suffer and not enough work will get done. But when adopted effectively, this isn't typically the case. In fact, with no restrictions on taking time off, employees often feel more motivated to be accountable and complete their work efficiently when their holiday time rolls round, to make sure they can fully switch off on their break, knowing that they've tied up any loose ends.

Improving work-life blend

Offering unlimited annual leave can help employees maintain a healthy work-life balance (or work-life blend, as we like to call it). By being allowed to take time off as and when they need or want to, many employees feel a sense of being 'given permission' to relax and switch off as well as working hard: whether that means travelling, visiting family, or spending extra time with their kids. Having this kind of explicit encouragement from employers to take time off can be really beneficial for mental health.

Attracting and retaining top talent

Employee benefits are always helpful when it comes to recruitment. And benefits that enable employees to be flexible and balance their work with their personal life are especially popular with jobseekers. It's important for companies to make sure they are shouting about the brilliant benefits their workplace offers, as this enables them to attract and retain top talent who want to work the way they do, making them an aligned fit.

What are the challenges of unlimited annual leave policies?

Some employers are hesitant to roll out unlimited annual leave policies. Many of them worry that by not putting a cap on holiday days, they are opening themselves up to the potential of 'bad actors' abusing the policy and taking it to the extreme. This is understandable: for a business of any size, it would be unsustainable to have employees taking weeks off every single month.

The good news is that, in practice, this is very rarely a real concern for companies. In one particular study run by Kronos, they found that the number of days taken off by their employees had increased by just 2.65 days a year after implementing their unlimited annual leave policy. As long as the details of your policy are communicated effectively to the whole company, and everybody has an expectation of what is considered a reasonable or unreasonable use of this benefit, you can mitigate this risk.

In fact, a bigger risk is perhaps a counterintuitive one: the risk that employees will actually end up taking less time off than before, leading to poorer mental health, burnout and even attrition from the company. For some employees, not having a clear number of days to take can result in anxiety about being judged for asking for 'too much' time off; or even just forgetting to take enough time to switch off, because they don't have a target to aim at. For example, CharlieHR found that as a startup, unlimited annual leave didn't work for them.

As with any benefit, unlimited annual leave will work brilliantly for some companies, and won't be a fit for others. If unlimited annual leave is a policy which you are considering rolling out to your workforce, it's crucial to encourage employees to make the most of it. This might mean tracking holiday uptake and sending reminders to those who haven't booked time off in a while, and role modelling from senior leadership walking the walk to ensure people don't feel intimidated about getting the best use out of this benefit.

What companies offer unlimited annual leave in 2024?

Here are just a few of the Flexified companies on our platform who have an unlimited annual leave policy.

Adaptavist Group

Adaptavist delivers innovative software across the world's most trusted technology ecosystems. They don't just offer unlimited annual leave; they are also open to compressed hours, and have a dog-friendly office.

Collins Property Recruitment

Collins Property Recruitment are specialists in property, and experts in people. As well as unlimited annual leave, they help their employees balance work and life with a 4-day working week and fully flexible hours.

Paddle

Paddle run and grow subscription companies automatically, unlocking digital innovation. They offer inclusive benefits alongside unlimited annual leave, like enhanced parental leave and being open to part-time employees.

People & Transformational HR

PTHR is a connected, collaborative group, in pursuit of good work for all. On top of unlimited annual leave, their employees work a 4-day week, and can make use of fertility treatment leave.

Tyk

Tyk is on a mission to connect every system in the world. Alongside unlimited annual leave, their team can make use of a work from anywhere scheme, as well as whole-company shutdown periods.