Will Goldman Sachs’ unlimited holiday harm wellbeing?
With Goldman Sachs now offering unlimited leave, other employers will be questioning whether they should jump on the bandwagon. But when it comes to tackling the work-life balance struggle, offering unlimited leave is only one element of a nuanced picture.
Last month, Goldman Sachs announced that senior staff will be given an unlimited holiday allowance. This approach is not new – early adopters included Netflix, LinkedIn and others. What makes it particularly significant is Goldman Sachs’ recent problems with a long hours culture for junior staff, their policy of returning staff to full-time office based working, and their prominent position as a top-tier operator in financial services.
Since the global pandemic came into our lives, individuals and organisations have had to respond quickly to shifting demands – from enforced home working, to hybrid working, to the ‘great resignation’, which morphed into the ‘great reshuffle’. Pay, benefits, flexibility and holiday allowance have increasingly become the way for employers to stand out to potential applicants.
What does the evidence on flexible working say?
The CIPD has recently released its 2022 Good Work Insights report, which provides an annual snapshot of job quality in the UK. The top three reasons why people move jobs in the UK are:
1. Better pay and benefits elsewhere (27%)
2. Unhappy with the leadership of senior management (21%)
3. Better work–life balance (20%)
That should make uncomfortable reading for organisations who have not yet recognised how important flexible working is for employees. The report also says that 48% of employees who moved jobs in the last year report they have more work-life balance in their new role. If employees don’t get the work-life blend they are looking for from an employer they will move on.
Is an unlimited holiday allowance a good idea?
In a world of uncertainty one constant remains true – putting your people at the heart of your strategies is how to succeed. Offering unlimited leave can support the work-life balance struggle, but it is only one element within the nuanced picture of how people behave in response to work-related changes.
Goldman’s holiday allowance may seem like a wholly positive policy, but it may not necessarily have a positive impact on employee wellbeing. Its impact will ultimately be determined by the perception of wellbeing within an organisation, an individual’s self-awareness of the amount of leave they need and their perception of how taking extra leave will be viewed by their peers.
Monitoring data is critical
Goldman Sachs has mandated that every employee must take a minimum of 15 days leave per year from next January, with at least one week of consecutive time off. The successful implementation of this policy will depend on how they use and monitor data about the approach.
PA has supported major European financial services organisations in the use of data to develop insights on what employees most value for support and development. We have found that organisations implementing unlimited leave policies need to keep a close eye on engagement scores and attrition data to make sure that they track the ‘whole organisation’ impact of their policies. Using automation will help eliminate time spent chasing data and free up more time to think about what the numbers actually mean.
Leaders may end up taking less leave
There is a risk that unlimited leave for senior leaders will make them reluctant to take their leave once there is an optional element attached to it. For those leaders who may be struggling with their performance, those concerns may lead to them taking even less of a break, when this is exactly what is required to refresh.
For others, the shadow that senior leaders cast by not taking leave may create a perception that as your seniority increases, your ability to take leave decreases.
Organisations implementing policies similar to Goldman will need to carefully consider the message it sends, the impact on wider organisational culture and the levers needed to influence the desired culture of the organisation and deliver growth and high performance.
A polarising policy?
Unlimited leave for senior leaders has the potential to create even more of a divide between leaders and the rest of an organisation, creating feelings of resentment as this benefit is not open to all.
The key to success is the way the policy is applied and the engagement and communication around its implementation. Organisations making these kinds of changes need to track the mood over time. Goldman Sachs (and competitor organisations) should monitor the impact of the policy closely and tweak the approach as necessary.
It’s not all about holidays (as much as we love them)
We have experienced a period of dazzling change in the world of work in recent years. By testing flexible working policies against both current challenges and projected future-of-work considerations it remains possible to deliver great performance. But this does require effective leadership behaviours and agile mindsets.
Flexible working considerations go well beyond leave policies and require leaders to develop a careful and detailed understanding of what employees truly value and what initiatives will help them to maximise their effectiveness.