Unlimited leave for staff? This business says yes
Amantha Imber decided three years ago to scrap the fixed limit on annual leave days for employees and let them take as much paid leave as they wanted. That decision has actually improved her bottom line, she said.
Melbourne-based Dr Imber heads up science-based management consultancy Inventium, and in 2016 was inducted into the Australian Business Women’s Hall of Fame.
While her decision in 2016 to offer unlimited paid annual leave to her team of 10 staff has attracted sceptics, Dr Imber said the results speak for themselves.
She explained that after three years of the policy, employees take an average of five and a half weeks paid annual leave each year. In return, rates of sick leave among her workforce have plummeted to 2.5 days per person each year, while engagement scores are in the 10th percentile for their industry.
Why offer unlimited annual leave?
The main reason behind the policy shift was “to really address the imbalance that was happening, in terms of working hours and non-working hours,” Dr Imber told My Business.
“We’re a management consultancy, and typically management consultants work very long hours.
“I was reflecting on the fact that in our industry, while leave is capped at four weeks, working hours are not, and it’s not an industry which pays overtime, which inherently seemed very unfair.”
Dr Imber said this was having a noticeable impact on the wellbeing and also on the performance of her employees.
“They were tired, they were doing a lot of travelling, they weren’t recovering properly — by and large because the amount of leave that employers are legally mandated to give wasn’t enough time to recover properly from all the work and travel that they were doing.”
Weren’t you worried about abuse of the policy?
“I did a lot of research [beforehand],” Dr Imber admitted, “because a lot of companies that have introduced unlimited leave have not been successful in doing so, and many have retracted their unlimited leave policies, like Kickstarter and The Tribune, to name a couple.”
The business owner suggested that having gone into the policy shift with eyes wide open, and having researched and understood what other employers had done beforehand, helped to allay any fears she might otherwise have had.
“I’ve certainly had... a lot of people in general ask me, ‘Weren’t you worried that people would abuse the policy?’” she said.
“To be honest, that was never a concern. I work with adults who I trust implicitly; our recruitment process is very lengthy and very comprehensive, and we’re very fussy about who we bring into the company.
“So, when you’re really picky with recruitment, you find people who are really great and you keep people who are really great. And I think as a leader, if you treat people like adults, they will act like adults.”There was one potential hesitation Dr Imber had about the move, which was, “Would people take enough leave and take advantage of the policy in a good way?”
What has unlimited leave meant for the business?
While people are taking, on average, an extra week and a half of annual leave each year under the policy, Dr Imber said the business’s bottom line has continued to be “really strong”, both in terms of revenue and profitability.
“Productivity has definitely increased while working hours have decreased,” she said.
“Staff tenure has almost doubled in that time, which I think is a fantastic result: people are ultimately happier and have a whole lot more energy because of the policy.”
Advice for other employers
Having achieved success for both her workforce and her business under the move to unlimited annual leave, Dr Imber has some words of advice for other business leaders.
“I think what is really key is that you’re implementing a policy where there is a culture of high engagement and trust between staff and management,” she said.
“If people are not engaged in the business and trust is broken, then I don’t think a policy like this works very well, and I think it does leave it open to abuse.
“But where you’ve built a business where there is high engagement, people believe in the company, they respect those around them, I think the policy works really well... when you respect your co-workers and your leaders, you don’t want to abuse the policy, because you’re kind of ruining it for everyone.”
Another piece of advice, she offered, is role modelling expected behaviour as the leader of the business.
“For me, I take about six weeks of leave a year, and I think it’s critical that if you’re going to introduce a policy that as a leader you need to role-model that,” Dr Imber said.
“Really, it’s about creating those social norms. And at Inventium now, it is really normal that people will take long weekends or a week off if they have had a particularly intense work time, and that is just the norm.”
Adam Zuchetti, editor of My Business