What is Unlimited Holiday Allowance?

Most people don't realize that 'unlimited holidays' are actually a thing, but it's been common in the US for some time and now companies in the UK are starting to roll out this perk too. It simply means that you can take however many paid holidays that you want - although of course, it's up to you to make sure you're still getting enough work done between these days off.

It sounds too good to be true, but actually there's some solid reasoning behind an unlimited paid holidays policy. It can increase staff productivity, morale, and motivation, and of course it's not bad from the perspective of employees, either. So why isn't everybody offering it?

Which companies offer unlimited holiday allowance?

Unlimited holidays are still offered more widely by US employers, usually at contemporary startups and tech companies: Netflix, Kickstarter, and LinkedIn all offer unlimited holidays, while recruitment site Glassdoor offers unlimited holidays to its US staff but not its UK staff.

However, companies in the UK are starting to follow suit, with primarily online businesses like Dropbox, Songkick, and Eventbrite offering unlimited holidays, as well as a few major multinational corporations like Honeywell, too.

Why do companies offer unlimited holidays?

There's no doubt that unlimited holidays can be an attractive bonus for prospective employees, and in many ways the policy makes a lot of sense. Why should it matter how many days you're in the office for, provided you get the work done? Unlimited holidays allow both you and your staff to take charge of your own schedules.

Unlimited holidays are also a great way to reward your staff for their hard work, and the system can help to increase productivity, too. Unlimited holidays don't give you a free pass not to do your job, so instead they incentivize getting things done so that you can maximize your time out of the office. It's just like we tell our kids: get your chores done faster, and then you can go and play.

Unlimited holiday is often employed by companies with a 'work hard, play hard' ethos.

Is unlimited holiday a good thing?

It can be, for some companies. Usually unlimited holiday works best when it's implemented in companies with clear goals and metrics, where each staff member is responsible for their own workload and the promise of unlimited unpaid leave can actually incentivize harder work. For companies like LinkedIn and Netflix, this is obviously working, and no doubt it's something that staff members at these companies will appreciate.

However, it does require a certain kind of company culture to flourish, if only because such an unrestricted policy will always be open to abuse and misuse.

Why unlimited holidays are sometimes a bad thing

Unlimited holidays only really work in companies with a certain culture and ethos because, unfortunately, the system is fraught with uncertainties. We've talked before about some of the challenges of unlimited holiday allowance, and a lot of them boil down to the elephant in the room: it's not really unlimited, is it?

Nobody can take every day off work - if you could, there'd rightfully be questions about why you're employed in the first place. So unlimited holidays are actually limited, but instead of being limited by an arbitrary number, the idea is that they're limited by your workload, or your schedule, or some other more meaningful metric.

The problem is that for many people this limit isn't clear. Actually, when companies implement unlimited holiday policies, many staff don't take enough holidays, clocking off 21-22 days a year rather than the 28 days' paid leave that UK workers are entitled to. And others take too much, which places an unfair burden on those who stay behind and take on the extra workload.

It can also, ironically, lead to a more unhealthy work-life balance: if you're tempted to try and take longer holidays, you'll also end up working long, late hours when you return to make up for lost time.

While arbitrary numbers of days off might sound pointless, actually a set number of paid holidays can provide a framework that you can build your annual calendar around, taking all the stress and decision-making out of the equation.

How many days off should you take each year?

In the UK, if you work five days a week, you're entitled to 28 days of paid annual leave per year, although some of this might have to land on Bank Holidays. Time off work is essential to prevent burnout and maintain productivity at work, as well as fostering a good work-life balance and positive mental health.

If you're thinking of booking some time off work to give yourself a break, one Dutch study found that eight days is the ideal holiday length, with health and wellbeing peaking on the eighth day that participants took off work.

However you do it, it's definitely a good idea to take advantage of your paid holidays every year - remember that they're yours to make the most of.

If you'd like to try IceHrm, then you're more than welcome, it's completely free for up to 5 employees.