Recently Richard Branson, founder of the Virgin Group, announced in a blog that he would be giving his employees unlimited annual leave. Posting an extract taken from his new book entitled The Virgin Way, he states: “It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel  100% comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business – or, for that matter, their careers!” Staff will not need a manager’s approval to take time off and the amount of time they take will not be tracked.

The idea originated with Netflix and is practiced by a number of other tech companies such as IBM and Hubspot. Netflix argued that because the idea of working 9 to 5 no longer applies a traditional annual leave policy is no longer appropriate either. This initiative has received a lot of positive press and while it is a laudable initiative in certain respects, there could be problems with its implementation.

On the positive side, it can encourage a more productive work atmosphere. Instead of concentrating on putting in the time employees will focus on completing tasks. This will encourage a more results-oriented workplace. This additional trust will improve the company culture as employees will feel obligated to turn in high-quality work to justify the time off that they take. Companies are also starting to realise that employees that have time away from the office to relax are usually more energized and productive when they are at work, compared to those who spend their life tied to their desk. A better work-life balance and greater independence should also help a company recruit the best talent. Unlimited time off will be seen as a major perk by any job applicant.

On the other hand, there are a few potential difficulties with unlimited annual leave. How do you judge how much time off is appropriate? Management may not have a formal system in place to monitor time off but if a number of candidates are vying internally for a promotion it is likely that a manager would favour giving it to the seemingly more dedicated employee, assuming their work was of a similar standard. Even though the evidence shows that those who refuse to take time off are often less productive employees it may still be seen as a badge of honour that the job is their only priority. This could lead to presenteeism. You could also ask yourself when are you ever truly up to date and finished with all of your work. For many people there will always be more emails to answer, judging when it is reasonable to take a break becomes a lot trickier when you are constantly being contacted by people looking for something from you.

Not all workplaces are suitable for this type of annual leave policy either. Office and tech jobs are the most suitable, as their work is often project-based and affords the most flexibility. Service-based companies are much less suitable. Richard Branson’s claim that he would like to see it used across all Virgin companies has been rightly criticised by others because it is unsuitable for his airline workers and other service staff. If it is not available to everyone it may become a management perk that excludes the majority of his workers.

Netflix and Virgin are right to try and adapt their annual leave policies to reflect the change in working conditions that technology has brought to large sections of the workforce, but giving unlimited annual leave without any guidelines will leave employees with some uncomfortable decisions to make. Without a more nuanced approach, unlimited annual leave may create more problems than it solves.

Niall Murray

Managing Director

Collins McNicholas Recruitment & HR Services