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The Memorial day long weekend will see plenty of Americans gladly taking the public holiday that is on offer, spending what marks the start of the summer season with friends and family. But when it comes to taking their leave entitlements, famously hard-working US employees are more reluctant. And the growing popularity of “unlimited leave” policies, particularly among US companies, seems to be having little effect on the amount of holiday workers actually take.
Stopping recording days off has been touted for some years as a potential boon for employee productivity and creativity. Netflix, though famous for its strenuous working culture, has long proselytised its boundless leave policy. Richard Branson, the UK entrepreneur, promoted it in his Virgin Group. Since the onset of the Covid pandemic, the idea has spread further. Goldman Sachs started offering its most senior bankers as much time off as they wanted in 2022. Companies like Microsoft and Roku have also adopted unlimited leave policies, in line with flexible post-pandemic working norms and to lure new talent in a tight labour market.
The US seems to have a cultural predilection for work; paid time off is not a legal mandate, and Americans work more hours and take less holiday than their G7 peers. Many American corporate leave policies have a “use it or lose it” clause: employees can take the paid time off they amass with each pay cheque, but after a certain number of accrued hours their holiday days cease to build, and often expire at the end of the year.
Aversion to losing earned vacation days has served as an important — though still insufficient — check on the American working instinct. According to the Pew Research Center, 48 per cent of Americans take all their allotted holiday days.
But the same psychology can lead to unexpected effects when it comes to unlimited vacation schemes. Surveys by Namely, a human resources company, found that, despite their extra freedom, American employees subject to such policies post-pandemic were taking only fractionally more holiday than those with limited paid time off. Anecdotal evidence suggests that in many hard-driving companies with no fixed holiday entitlement, employees fear that taking days off will appear selfish or lazy, or harm their career advancement.
Americans can be scornful of their more holiday-loving European counterparts, and put US economic dynamism down in part to their work ethic. But numerous studies highlight the benefits of adequate time away from work — including better mental and physical health, and productivity. Leave is also important for society. Burnout, exacerbated by back-to-back shifts during the pandemic, has forced doctors and nurses out of health systems in the US and elsewhere. Requiring employees in financial services to take holiday, when they hand over their responsibilities to someone else, is seen as a way of preventing “rogue” trading incidents.
Some companies may, of course, have secretly suspected all along that unlimited paid time off policies would turn out to be self-limiting. But if businesses want them to function as billed, bosses can model good behaviour by taking more leave themselves and encouraging their employees to do the same. Mandating a minimum number of days off, within an unlimited framework, can help to remove any stigma around taking time out.
Innovative human resources policies, aimed at getting the best out of employees and improving work-life balances, should be encouraged. But they should be reviewed and ditched if they are not achieving the desired intent.