With top talent hard to find, businesses are evolving their candidate offering to stand out in a busy market. Creative initiatives like unlimited paid annual leave are becoming more common place as businesses look to recruit for and retain their teams.
What is the reality of unlimited annual leave? Is it a good idea? Do people actually take more days off? How does it even work? We sat down with Ronn Soukotta, Director at Fingo, a professional services company whose culture "challenges conventional thinking", to find out what happens when you offer unlimited annual leave.
Tell me about your annual leave policy
Our policy is that we provide unlimited paid annual leave to employees on the basis of a "Freedom with Responsibility" principle (shamelessly adopted from Netflix).
On average, do employees take well above the standard 20 days annual leave?
No they don't. The averages in 2017 and 2018 were 18 and 23 days respectively.
How do you ensure leave is taken guilt-free and without judgement?
There's absolutely no judgment around people taking leave because our entire culture is built around the goal of supporting people to be as effective as possible. This is quite distinct to the industrial age ideal of being as efficient or productive as possible - an ideal many work environments still adhere to. Taking breaks (including leave) to freshen up (or "sharpen the saw" as Stephen Covey puts it) is a vital ingredient to being effective and therefore something we very much encourage.
Whether or not leave is taken guilt-free is another matter altogether and comes down to how comfortable each individual is with the freedom we provide. In our case, the guilt doesn't come from external judgment, but rather from self-judgment. Given the high-responsibility people we employ, and the "Here to Serve" culture that we cultivate, getting people to take leave without feeling guilty is a bigger issue for us than stopping people from taking too much leave!
Why did you make it part of your business strategy?
It's not so much a part of our business strategy as it is a natural outcome of the culture we are consciously cultivating.
What impact has it had on your business - positive or negative? Did any of the changes surprise you?
One of the primary impacts of this policy is that it enables people to take time off when they need to and not just when they planned to. Typically people associate annual leave with a Christmas break, travel and/or family holidays. At Fingo we want our people to be able to do all of these AND be able to take time out to recharge after a busy period, deal with family situations, or any other range of life circumstances. Rather than compelling people to be at work when in reality their mind and energy are elsewhere, we would rather give them the freedom to deal with whatever they need to, and come back to work refreshed and re-energised.
What has been the feedback from employees? Have you seen an increase in employee engagement?
The feedback has obviously been positive. I wouldn't say that there has been an increase in employee engagement specifically due to this policy - although it is clearly appreciated. Our employee engagement is high thanks to our overall focus on people and culture. As noted earlier, the annual leave policy is simply a natural outcome of this culture.
Do you think businesses have to be creative in order to attract the best talent in NZ?
To attract the best talent I think businesses absolutely need to be conscious and intentional about their culture. All talented people are attracted to organisations that help them find a sense of purpose in their work, and provide them with autonomy, support and recognition. The specific "features" (ie. perks) that can arise out of such a culture (eg. unlimited paid annual leave) are always appreciated but are not the most fundamental thing talented people are looking for.
In my opinion it is a mistake to focus on offering "creative perks" as a way of attracting talent without having a cultural context in which those perks make sense.