Funny how the pendulum swings. During the Great Recession, businesses sliced and diced their workforces like Freddy Krueger at a junior high sleepover. Any perception of loyalty between employer and employee was pretty much destroyed. With the economy recovering, companies are working harder now to attract – and retain – individuals who have more options and aren’t afraid to exercise them.
The latest corporate perk? Unlimited time off. The idea really started gaining momentum in 2014 when Virgin Group founder and billionaire Sir Richard Branson publicized his “endless summer” campaign. Big-name organizations such as LinkedIn, Netflix and Grant Thornton, the nation’s sixth largest accounting firm, also are in the fold. But the concept’s credibility received an enormous boost several months ago when General Electric announced its “permissive approach” to days off.
Yes, the very same GE that years ago under Jack Welch unceremoniously lopped off the bottom 10 percent of its managers annually. Fortunately, the corporate culture is changing; employers understand that employees who feel trusted, empowered and appreciated are more productive, making businesses more stable and successful.
GE’s new approach essentially allows executives and senior employees to take off as many days as they wish – as long as they finish their work and schedules permit. The company says it will no longer keep tabs on vacation, personal or sick days, a policy that impacts roughly 43% – or 30,000 – of the company’s salaried U.S. employees.
Hold off on booking that two-month South Pacific cruise, though. Unlimited vacation time isn’t designed to create a free-for-all in the workplace. Yes, it’s an attractive perk, but in reality it’s simply a method for encouraging employees to use their off days responsibly. The bottom line is that it’s a big-time money saver for organizations because they don’t have to compensate workers for unused vacation days – or pay out accrued time off for those who leave the company.
The numbers actually are staggering. According to Project: Time Off, citing research conducted by analysis firm Oxford Economics, the typical employee costs his company nearly $1,900 annually in vacation liability and that “U.S. companies carried $65.6 billion in accrued paid time-off costs forward on their books last year.”
So it would seem that a liberal time off policy represents a win-win situation for employee and employer. Since only an estimated 1% of U.S. companies have adopted this approach, it’s premature to identify this phenomenon as the wave of the future. But it certainly bears watching.
Said Pamela Harless, chief people and cultural officer for Grant Thornton: “This is a modern move for an industry where these types of benefits aren’t really common. We are convinced it will help us to be far more attractive in retaining talent as well as attracting talent. We are very confident that we are the right type of culture and the right type of environment where this can make a huge difference for our people and for our clients.”