It’s no secret that Australians love their annual leave.

In recent years, many companies have chosen to go above and beyond minimum standards by offering extra leave – reflecting the view that rested employees are generally happier and more productive at work.

Some companies even let employees decide how much leave to take. For example in 2014, Virgin Group unveiled an ‘unlimited’ annual leave policy. Our 2014 blog observed that “time would tell” if the unlimited annual leave policy was an enlightened approach to workplace flexibility, or a step too far.

Four years on, we are seeing reports that unlimited leave is working so well that some companies are offering such leave fully paid. Companies with unlimited leave policies have reported an increase in trust and engagement levels, higher rates of productivity and less burnout.

The available data indicates that employees who have access to unlimited leave policies are not abusing the system by going on obnoxiously long holidays – far from it. Rather, employees tend to take up to five weeks leave a year, little more than the statutory minimum for most.

It is easy to remain sceptical of ‘unlimited leave’ policies. For one thing, placing the onus on individual employees to decide how much leave they take each year may create stress of another kind: Will my employer think I am lazy / taking advantage / not a team player? It also requires a high degree of trust between management and employees.

It is apparent that simply providing employees with more annual leave is not a panacea, particularly if employees see work as something to be avoided. The goal of enlightened companies should be to make employees feel as good about work as their holidays.

A generous annual leave policy is one way for companies to demonstrate that they trust and value employees. Of course, flexibility works both ways. But, where it works, it appears companies can be rewarded with higher productivity, boosts to morale and motivation, employer-of-choice status, and reduced ‘flexibility stigma’ in their workplaces.


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