The Smoke and Mirrors of Unlimited Paid Time Off

An anonymous reader quotes a report from the BBC: Investment-banking firm Goldman Sachs made an eye-catching move last week: it granted unlimited paid holiday to its senior staff. According to a memo seen by a number of media organizations, partners and managing directors will be able to "take time off when needed without a fixed vacation day entitlement." Junior staff were given two more annual days off, and the company said all workers had to take a minimum of 15 days holiday each year. At first glance, this looks like a positive initiative from a company known for grueling work hours and demanding culture. Unlimited paid time off (UPTO), after all, could allow overworked staff more time to rest and improve their mental health and overall work-life balance. Plus, a generous holiday policy at the top could trickle down into the wider workforce, potentially making for happier and more productive staff on the whole. Yet what sounds like an amazing benefit comes with major caveats. Workers will likely only take a decent amount of holiday if firms create an environment that encourages them to do so. In some firms with UPTO, workers end up taking less holiday -- not more -- because of peer pressure and perceived expectations around 'acceptable' amounts of holiday.

The latest data, meanwhile, shows UPTO isn't the benefit that workers covet the most; rather than an unlimited amount of holiday, most people prize flexibility, including the option to work from home. Is this recently introduced perk the shiny new toy workers have wanted all along -- or is it the gift no one asked for?

"With UPTO, workers are not technically owed any vacation days, since there's no fixed number, and everything must be cleared by the boss on a case-by-case basis," notes the BBC. "For workers, establishing what the 'right' amount of paid time off to ask for often depends on observing the behavior of colleagues and bosses. If colleagues are only taking 10 days per year, asking for more could feel inappropriate." Companies that adopt UPTO, says Peter Cappelli, professor of management at the University of Pennsylvania's Wharton School of Business, have "moved from a model where you accrue it -- so you're actually owed the vacation -- to one where you kind of [have to] ask. And there's nothing stopping your boss from yelling at you if you want to take additional time off -- or punishing you if you do."

The BBC adds, citing Cappelli: "UPTO also removes the safeguards that protect workers' interests if they can't take time off -- there are no leftover days workers are legally required to take by year's end, or carry over to the next year. There's also nothing for workers to cash out if they quit and have days left over, which [...] saves companies money."