Employees can have a better work-life balance since they are free to take time off whenever they need to. In the long term, this will increase productivity, motivation, and engagement among your teams due to the trust that the policy will develop among your staff.
The way we work has now changed. We’re no longer doing “my Wi-Fi’s not working, someone's grandparent is no more, my child spilled over my laptop or I am sick” to take leaves. The times of exaggerating excuses, and justification for taking leave are gone. People want their time off to be respected. Many workers began putting more emphasis on mental and physical health and their families during the pandemic.
The leave policy is hard to frame to meet up with the expectations and demands of the workforce. While compensation has traditionally been one of the major factors for employee retention and employee attrition, people of choosing culture above it. The ability to work from anywhere, the ownership and agency of law, the flexibility, and employee-friendly policies are what are making the employees stay or switch.
HR platform, Namely, analyzed data from over 125,000 employees and found that employees with unlimited vacation options took 13 days off a year versus 15 days for those with traditional paid time off
Jagpreet who works at Headout said - “The first time my parents heard about unlimited leaves, they were shocked. My father has been in government service for like 30 years, and he was like What is this going on? I had to explain how ownership and agency work.”
As per SHRM’s research, 1% of employers worldwide offer this liberty to their employees.
Jay from Cred says- “one thing you know, as a value, even if we talk about the platform- that Cred is trying to be, the first statement that we say is, we are trying to build a community of trustworthy individuals, who pay their bills on time. So trust is another important factor when hiring people. So we don’t have to monitor working hours, online status, or monitor anything around how they run their game: Simply take ownership and get work done.”
Dhruv from Orange health- At Orange Health, our goal is to make sure that our employees have the opportunity to take time off from their job if they need it. We don't monitor how much time people spend working online or how many hours they put in at their desks each day; instead, we focus on what matters most: performance. If an employee is doing well and meeting our objectives, they get rewarded with more work time so they can get even better results!
The culture is exceptionally merit-based. When things don't move, suitable people can see that it's not moving. And that is a motivational factor for you to ensure that things are at par with other people. That culture I think, in a sense, makes you an ethical person, in just taking leave as a metric.
Netflix said—we don't have a 9-5 policy! Instead, employees take as many or as few vacation days as they feel they need. Netflix also mentioned that they realized they should focus on what people get done instead of how many days they work. It's just like they don't have a 9 am-5 pm workday policy! And so do we! We believe in giving employees ownership over their time off because it allows them to use it when they want to, not when someone else tells them to.”
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This week we’re in conversation with Jagpreet Kaur, Associate - People and Culture at Headout, and we talk about leaves at her organization.
Q. Can you give us a brief about how your leave policy works and what is the approval mechanisms process?
So the policy is that we have no policy. You can do whatever you want to because we have flexible work hours, which goes with the flexible work policy for logging leaves. We have Keka, and while it is not compulsory to log leaves there, it is preferred. However, as long as we inform your manager that we’re on leave, we are good to go. The only criteria around unlimited leave are that if you're going on a break that is a month or two long, it requires you to give an advanced heads-up to your manager and team.
Q. Have you noticed a change in the number of leaves? Have they increased or decreased?
So again, we don't have a specific platform that tracks everything, but pros usually know ( pros are the reporting manager ). how many leaves you are taking? This one time, I remember my pro asked me to take a leave because I had not been on leave for very long, but the managers were not tracking leaves at all for performance management or employee engagement with the company.
A pros meeting is held every Tuesday, and among the many other things they discuss, they also occasionally calibrate whether people are taking enough leaves, just to check on them and let them know to take leaves if they haven’t already. We also have monthly and weekly cycles led by reporting managers, to check on people.. So, we do emphasize on the importance of taking leaves, in case they haven't.
Q. How do you ensure that people are not abusing the unlimited leaves or people are not, taking advantage of the flexible policy that you have in place?
So for that, we have six monthly feedback cycles in place. The whole team gets into the feedback cycle, and since we have quarterly OKRs that are a culmination of two OKRs, if you're on top of the work that you've done, the number of leaves you take will be a complete non-issue. Even if you were on leave for two months, that's your headache. I am planning a trip next week but I am not thinking about my leaves, I'm only thinking about how to manage my work.
Q. Do you feel that people are so flexible and are being lenient with their leaves, is it building a burden on the team? How is the communication working around it?
You have to manage within the team, if somebody is going on leave for that one time, preferably, inform us in advance. We also set our OKRs for this quarter to be minimal to be able to take their workload accordingly. And then the managers also come into play here, where they help manage the staff or lower down the OKR in order to reduce the burden of the rest of the team as well.
Q. Do you think there is an unspoken limit to the unlimited leaves that you have?
I don't think so. Yesterday my roommate woke up not feeling up to work, so she opened Keka and applied for leave. In the description, she simply put a sad emoji and the leave got approved without any questions asked. You do what you want to do. And I guess for the people who don't like the unlimited leaves policy, I think they're the people who just want to be told that they have to be on leave because they cannot stop working. Some people like working, and are workaholics by nature, which makes it difficult for them to take a leave. I think they need to just come out of it, and that takes time; I was also that sort of person, but now I've realized that I need to manage work rather than being guilt-tripped about taking a leave.
Q. How important do you think ownership, accountability, and taking agency of your work is to work around a culture that works on flexible work, async, and remote work?
I think this starts from the time you're interviewing them. You trace a person's ownership since then. We have been very sure of hiring people who are absolute culture fits because we know having these policies exploited is pretty easy. But then you also have to understand people in a way that you trust them enough to know that they're taking a leave when it is necessary and just not exploiting the system.
Q. Anything else that stands out and encourages the culture of guilt-free leaves and motivated employees?
Varun Khona, the CEO of Headout, recently implemented an award for “Headouter of the Year” for the person who travels the most, to encourage people to go out and travel, to head out. essentially! This award, among many others, is declared and presented during our annual meet-up. Pretty encouraging, I think, to take guilt-free leaves!
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Work allocation - How to handle the work of workers who are on a prolonged leave of absence should be discussed with team supervisors. Do you intend to ask the employee who is taking a leave of absence to finish some of the high-priority duties, or will you find a replacement? Before establishing an unlimited PTO policy, it's critical to make sure you have the resources to finish any unfinished business and maintain productivity.
Finances - The majority of employees accrue their earned leave balance and pay it out at the end of the year as savings. With unlimited PTO, the business will wind up saving a tonne of money that would have been used to cash in on employee accrued vacation time. On the other hand, unlimited leaves can affect a company's business.
Tracking and Action - Tracking leaves is important. It helps us find who is abusing flexible policy and if it is effective or not. Sidu Ponappa on TSOW Podcast said, “Tracking leaves is important, reverse the metric and see who isn’t taking leaves.” It also helps us find who is abusing flexible policy and if it is effective or not.
Learning and Modifying- Sufiyan Sait who works at Toplyene said - A few reasons that we moved away from the unlimited leave policy - A) There is no clear definition of fair usage. What seems to be fair for one may not be the same for others. B) People felt guilty when taking leaves. Since it wasn't defined, people kept saving in case there was an "emergency" and ended up not taking any. C) Lastly, planning becomes a problem. If you know you have X leaves, you can plan your leaves well. People don't drive in uncertainty
Minimum leaves - “There was a thing called Mandatory leave at the Urban company, where your manager has to give you a week off mandatory in three months time, this helped keep a check on leaves,” says Dhruv
Type of role- Dhruv who is Category Head at Orange Health mentioned - “We're a very frugal startup, and we will be working in the same way: we'll be very clear about our workforce. When I'm not here I may not have a backup, but that depends on the role. For example- for PMs, the work can be transferred to the team, but for individual contributors and managers, it's difficult.”
Is there an unsaid upper limit - Make a decision on how you will handle workers who abuse the limitless PTO policy? How do you calculate that? The effectiveness of the policy will ultimately depend on how your organization's culture as a whole encourages openness, reliability, and responsibility. Abhash Kumar who is VP of Marketing at Springworks says “You make policies for the top 95% and not the bottom 5% employees”
Are Leaders taking enough leaves? - The employees feel guilty and hesitant in taking leaves if senior management is not doing the same. The number of leaves that are acceptable is then unclear.
According to staffing firm Randstad India, 35-40 percent of Indian employees do not take leave and around 25 percent avoid it due to FOMO (fear of missing out) at work. When properly implemented, an unlimited paid time off policy can improve your company's human resource management techniques. Employees can have a better work-life balance since they are free to take time off whenever they need to. In the long term, this will increase productivity, motivation, and engagement among your teams due to the trust that the policy will develop among your staff.
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