Two years ago, at an all-staff meeting, I announced that we would be introducing unlimited annual leave. To be clear, I wasn’t talking about unlimited unpaid leave. Rather, staff would now be able to take as much leave as their hearts desired and every single day of it would be paid.
I had made the decision because I felt that employment law around leave in Australia was fundamentally unfair. It is heavily biased towards employers. In a standard full-time job, staff are entitled to four weeks of annual leave and are expected to work 38 hours per week. But in management consulting, the industry in which Inventium falls (we're an innovation consultancy), it is not uncommon for staff to work 50+ hour weeks and travel interstate or overseas relatively frequently. So while annual leave is capped, working hours are not.
To rectify this imbalance, and help bring more balance into my team’s lives, unlimited leave was launched. We called it Rebalance Leave, because it wasn’t about more leave for leaves’ sake, it was intended to help staff lead more balanced lives. And two years on, I can confirm that it has made a huge difference.
Sick leave is often seen as a good indicator of the “health” of a company. When employees are engaged and thriving, sick leave tends to be lower. The average worker in Australia takes between eight and nine sick days per year. Inventium was already pretty “healthy” with our average sick leave in the year prior to unlimited leave being 2.45 days. Two years on, that has almost halved to an average of 1.4 days per employee, which is almost unheard of in Australia.
Despite our success, there are many companies (mostly US-based) where unlimited leave has received much criticism and been a major flop. Rather than taking more leave, staff took less leave for fear that they would be judged by their manager as taking too much leave. We didn’t have this issue, and here are the biggest learnings I took from it in making unlimited leave successful.
Picture the scene. you've organised a week off work for some much-needed R&R. On the first day of your holiday, you're struck down with the flu. Instead of sunning it up on the beach, you spend the entire week coughing up phlegm in bed.
If you'd been at work, you definitely would have called in sick on these days - so why should annual leave be any different? Let's take a look at the legalities.
Four weeks isn’t enough
Before I introduced unlimited leave, staff took an average of 19 leave days per year. So they were pretty much using up all their leave – which is actually unusual. The average worker in Australia has accrued 20 days leave, meaning they are not actually taking their full four weeks every year.
One year after launch, the average amount of leave taken was 24 days, and two years on, it is up to 27 days. As a business owner, I see this as a huge success. It means staff are taking what they need (which was clearly more than four weeks) but by the same token, the policy is not being abused.
Interestingly, five and a half weeks is about what I now take. This consists of a couple of weeks off over Christmas, a decent three-week family holiday in the middle of the year and the occasional long weekend where I’ll take the Friday off work.
Model it from the top and the sides
I think that it’s no coincidence that my own leave amount mirrors what staff now take. Before launching the policy, I did a tonne of reading about other companies that had gone down a similar route and what had happened. I wanted to be careful to avoid the trap of the amount of leave being taken decreasing rather than increasing.
What I took from reading about other companies failed efforts were two things. First, there still needs to be a minimum amount of leave to take and it needs to be tracked. This at least gives staff comfort in taking the bare minimum. Second, it needs to be modelled from the top. I think that if I still took the bare minimum in leave, it wouldn’t be seen as acceptable for others to take more.
In addition, when someone took a Rebalance day or several after a period of a few hectic weeks, I would talk about that publicly in all-staff meetings and reinforce what a great thing it was that this person was taking care of themselves.
But it wasn’t just about me modelling it and talking about it. What started to happen was that team members would look out for each other. I frequently heard stories about individuals on my team who had encouraged others to take a Rebalance Day because they looked like they were having a stressful few weeks. And if it wasn’t for the nudge, some people told me they probably wouldn’t have taken it. The power of peers should never be underestimated in making a policy like this successful.
It’s about the intent, not the instruction
I remember when I launched unlimited leave thinking carefully about whether we needed a set of rules to govern how it was to be used. But laying out a set of instructions seemed like a patronising thing to do, given one of the points of the policy was about treating people like adults and empowering them to make decisions for themselves.
So instead of creating a set of instructions, I launched it with a clear intent. The intent was about using the additional leave to achieve balance in one’s life. Hence the name: Rebalance Leave. I made it clear that it was not to replace other kinds of leave that have specific purposes, such as Parental Leave, Sick Leave, Carer’s Leave and so on.
There have been numerous examples where this has been respected. One example was a person on the team who wanted to take more than the one month’s parental leave that we offer. He assumed (correctly) that it would be unpaid given the intent was spending more time with the little people in his family rather than needing time off because he was “unbalanced”.
Another member of the team moved to Spain for eight months to spend time with her husband who was living there for a year for work. Again, it was assumed that this would be unpaid given it wasn’t about rebalancing, it was simply about capitalising on a once in a lifetime opportunity.
One of the key ingredients that I believe made unlimited leave successful at Inventium is a high amount of trust between everyone on the team. In addition, because leave doesn’t have to be “approved”, it takes a respectful and thoughtful team to not end up with everyone on leave all at once and create issues for our clients and the work that needs to be done.
Dr Amantha Imber is the Founder of Inventium, Australia’s leading innovation consultancy.