'Modernised policy' | Why Microsoft's 'unlimited leave' is a perk workers might not actually use

Why Microsoft's 'unlimited leave' is a perk workers might not actually use

Microsoft employees can now take unlimited leave as one of the perks of their job, the company has announced.

As first reported by The Verge, the announcement was made in an email to employees by the tech giant’s Chief People Officer, Kathleen Hogan, who wrote: “How, when, and where we do our jobs has dramatically changed.

“And as we’ve transformed, modernizing our vacation policy to a more flexible model was a natural next step.”

The policy, which is being called “Discretionary Time Off,” will apply to all salaried US employees and will begin on January 16th.

The Verge reported that Microsoft will offer 10 corporate holidays, leaves of absence, sick leave and mental health days and even time off for jury service and bereavement in addition to their new unlimited time off policy.

Does “unlimited” time off work?

At first glance, the idea of having an ‘unlimited’ amount of annual leave seems like a great scenario for both employees and their employers. Workers themselves can be safe in the knowledge that they can take a dream trip (or several) without having to seek special dispensation. And for firms themselves, it’s logical to think that such a lucrative perk will benefit everything from staff wellbeing and culture, to talent attraction and retention.

However, Microsoft’s unlimited leave policy could easily could with several drawbacks.

In 2022, for example, e-learning platform specialist THRIVE, abandoned its unlimited leave policy recently following trials that led to a number of issues, including many staff members not taking enough holiday and, consequently, increased levels of stress. The company concluded that when a numerical figure or limit was put on holidays, people felt more subconsciously motivated to take them.

After engaging with more than 120 staff members over a 45-day period, which involved 121 meetings and drop-in sessions, THRIVE decided to replace its unlimited holiday policy with a holiday policy based on equity. This includes providing managers with clearer, holistic guidance on holiday taking and making it easier to spot signs of stress and strain.

Sean Reddington, Co-Founder and CEO of THRIVE, said: “Naturally, my initial instinct when trying to promote staff wellbeing was to offer employees unlimited holidays – what could possibly go wrong with that? Well, we’ve since uncovered that, despite our best efforts to encourage people to take all the annual leave they want, there can be some feelings of anxiety about what is deemed an ‘acceptable’ amount of time to take off. Sometimes people take less time off to rest than they would have with a fixed allowance. Those working in customer-facing roles may also find it more difficult to take annual leave than those in more remote, tech-focused roles – so achieving equity of rest across different roles throughout the company can be challenging.

“Equally, while having unlimited holidays may provide a safe space for someone struggling with mental health to take the time they need without providing a reason, managers may miss the signs of someone needing support. The risk is that people may get too far down that road alone. There’s a fine balance to strike here – we want to allow people to take mental health days without justification, but with a proper review process so that we don’t miss out on the opportunity to provide essential support.

“Aware of these challenges, we considered reversing our unlimited holiday policy altogether - but upon engaging in a consultative process over a 45-day period and holding 121 meetings and drop-in sessions to understand people's feeling about the policy and consider any objections, we realised that we needed to re-release our policy. By providing clearer guidance for managers on managing leave, we hope to create a more equitable holiday taking system and make it easier to spot signs of time off indicating a wider issue. We continue to be led by our people and data, however, and will keep a close eye on whether this additional clarity has the desired effect.”

Even if it’s not unlimited, could extra-time off really help burnout?

Another alternative to unlimited leave, introduced at several major firms since the start of the pandemic, has been company-wide shutdowns. The likes of LinkedIn, dating app Bumble and even Nike have shuttered their operations for several days at various stages in recent months, in the hopes that staff will return refreshed and recharged.

However, some studies have suggested that simply giving staff a few extra days off is not the most effective way to reduce the stress and fatigue that has reached epidemic levels over the past 18 months.

Analytics solutions firm Visier recently surveyed 1,000 full-time employees across the US about their experiences with workplace burnout.

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The results found that time off work, often seen as the best way to recharge, isn’t enough to alleviate the chronic burnout the majority of employees are experiencing.

While more than half (54%) of employees anticipate taking more time off this year compared to last year, one-third reported they’re expected to check in on work while on vacation. Additionally, nearly half (49%) of employees said PTO only temporarily relieves their burnout.

Surprisingly, the Visier study also found that more than 37% of employees said they’re not comfortable talking to their supervisor about their burnout. When asked why, employees’ top reason was a fear of being seen as incapable of doing their jobs.

Furthermore, 73% of those surveyed believed that managing burnout was their responsibility and not their employer’s.

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