People & Human Resources

Richard Branson is letting his staff take as many holidays as they want: Should you do the same?

Eloise Keating /

Would you grant your employees unlimited annual leave?

That’s just what Virgin founder and entrepreneurial superstar Richard Branson is trialling in the US and UK head offices of Virgin.

In an extract from his latest book, Branson said he stumbled upon what he thinks is “one of the simplest and smartest initiatives [he has] heard of in a long time” when his daughter told him about the annual leave policy, or lack thereof, of content streaming giant Netflix.

 “[Netflix’s] policy that isn’t permits all salaried staff to take off whenever they want for as long as they want. There is no need to ask for prior approval and neither the employees themselves nor their managers are asked or expected to keep track of their days away from the office. It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel a hundred percent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business – or for that matter, their careers!”

Branson said he has already introduced the same kind of policy in the US and UK and “assuming it goes as well as expected, we will encourage all our subsidiaries to follow suit, which will be incredibly exciting to watch”.

But are Branson and Netflix’s moves a good idea and could the same non-policy work for your SME?

Martin Nally, managing director of HR Anywhere, thinks so, telling SmartCompany this morning taking flexibility one step further to annual leave and sick leave policies is “a great idea” and Branson should be congratulated.

But he says it can only work “if there is a culture to actually promote it”.

Nally says Netflix has developed a “very strong culture” that is built upon an “honour code” signed by employees, who agree not to lie, steal or cheat and not to tolerate those who do.

“There is apparent flexibility but it comes with a massive expectation,” says Nally.

“[Netflix] has the ability to provide incredible flexibility but it is expecting complete and total honesty and incredible performance [from staff] … There is low tolerance for mediocrity.”

“The employees are signing on to a whole way of being, they are not suddenly given unlimited leave and told ‘go for your life’ … It’s a sophisticated culture, they buy into a set of values.”

Nally describes flexible work practices as “the new black, the new fashion” and says he has worked with one Australian company that introduced a similar policy of unlimited sick leave, with a back-up insurance plan to cover workers suffering from long-term illnesses.

“But we only got to that point because absenteeism was under control,” he says. “There was a relationship of trust, so there was no risk.”

Nally says the same would apply to Branson’s introduction of unlimited annual leave for Virgin staff.

“Branson is a businessman, he wouldn’t do something if there was risk.”

While Nally says some employers might look at this idea and think it is “crazy”, it is possible to introduce more flexibility into a workplace if a psychological contract is formed with employees, who will be encouraged to work harder if they are trusted by their employer.

And he says SMEs don’t have to go the whole hog to start with.

“Let’s start small, let’s start with something like the Melbourne Cup and be flexible,” says Nally. “See how that goes and then look at Christmas and Easter.”

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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