The Leave Policy That Makes Employees Take Less Holiday

Unlimited annual leave looks brilliant on a job ad. It signals trust. It signals freedom. It tells candidates: we treat you like adults.

Then reality shows up.

The team stops taking leave. Not because they're workaholics (although some are). Because when there's no number attached to their entitlement, it stops feeling like theirs. They wait for permission that never quite feels granted. They watch what the MD does. And if the MD hasn't taken a week off since 2022, nobody else is booking Tuscany in August.

This is the conversation happening in HR circles right now, and if you're an agency owner considering unlimited leave or you already have it in your contracts and you're wondering why it's not working you need to hear what practitioners are actually experiencing on the ground.

The paradox nobody tells you about

The research backs this up, and so does every HR professional who has ever implemented unlimited leave in practice: people take less time off, not more. Without a concrete number, leave stops feeling like a benefit and starts feeling like a grey area. Most employees, especially conscientious ones (and agencies tend to attract those), will under-use it rather than risk looking like they're taking advantage.

What you end up with is not a liberated, rested team. You end up with a team that is burning out while technically having access to unlimited time off.

For creative agencies, this is not a minor inconvenience. Burnout in creative industries is already endemic.

It is the number one reason your best people leave, and the one pain point that almost no competitor in your sector is addressing properly. An unlimited leave policy that results in people taking fewer holidays is not a wellbeing benefit.

It is a liability dressed up as a perk.

The culture problem you can't policy your way out of

Here is the thing about unlimited leave that no contract clause can fix: it is entirely driven by culture, and culture is entirely driven by behaviour at the top.

If senior leaders are not visibly, consistently taking leave, if they are replying to Slack at 11pm during their so-called "time off", the team will mirror that behaviour regardless of what the handbook says.

Unlimited leave requires a level of psychological safety and genuine cultural modelling that most agencies have not yet built. It also requires that the people with the authority to grant leave are actively encouraging its use, not passively permitting it.

In agencies where unlimited leave has been scrapped, the reason is usually one of two things: a handful of people booking 50 or 60 days while the rest take almost nothing, or a general atmosphere of guilt and uncertainty that drains the goodwill the policy was meant to generate.

Both are management problems. And both are predictable.

The compliance headache you did not sign up for

Even if your leave policy says "unlimited," UK employment law still requires that your employees take their statutory minimum entitlement — currently 5.6 weeks for full-time workers. That obligation does not disappear because you've been generous with the upper limit.

In practice, this means you still need to track who has taken what. You still need to intervene if someone is not taking enough. You still need a process for maternity and other statutory leave that defines what accrues and how. The admin burden does not go away; it often gets worse, because you have removed the natural structure that a fixed allowance provides.

What actually works

The agencies and businesses that have had the best results tend to use a version of the same model: a defined minimum, a recommended average and genuine flexibility above that.

Something like: everyone takes their statutory minimum as a floor, we recommend six weeks as an average, and if you need more for a specific reason, you apply and it's considered. Carry-over is removed. Leave counts against statutory entitlement first.

The policy is framed around wellbeing rather than just permission.

This gives people the thing they actually want from unlimited leave: certainty that they will not run out, without the psychological ambiguity that makes unlimited leave stop working in practice.

You also need to build the process: how leave is booked and authorised, how cover is arranged, what the deadlines are for requests and how performance is managed in someone's absence.

These are not bureaucratic niceties. They are what makes flexibility sustainable in a small agency where everyone's absence has a real operational impact.

The bottom line

If you are considering unlimited leave because you want to signal trust and attract talent, the intention is right.

But the execution matters more than the headline. A policy that results in people taking less leave than they are legally entitled to is not a benefit. It is a problem waiting to become a grievance.

Get the structure right first.

The generosity will follow naturally.

If you are unsure whether your current leave policy is working the way you think it is, or if you are building your first proper HR handbook and want to get this right from the start, that is exactly the kind of work we do here.

Book a call with Elena to talk culture

Learn more about what we do at What if HR

How to keep hold of your high valued employees.

So, you’ve put in your time, effort, and money to find the most AMAZING candidate…

Congratulations – we love it when a plan comes together!

Your hard work and dedication have paid off, now it’s time to put your feet up, right?!

Wrong.

Many businesses will pull out all the stops to find the freshest candidates. However, once they’ve been secured, those businesses can be guilty of taking their eye off the ball…

Staff recruitment is vital to all businesses. Employee retention is a just as important, yet it rarely ever receives the same level of attention.

It’s therefore no surprise that some star-employees might begin looking elsewhere…

An employee has asked to leave – what do you do?

Most people’s go-to solution? Money.

But what if you don’t have the budget to offer them a raise? What if they’re not motivated by money? Are you simply resigned to losing them?

Don’t go down without a fight. Here’s a few ideas that could help change the mind of your wantaway employee…

Make them feel appreciated

In 2020, 68% of remote employees had lost interest in working hard.

Why? They believed their efforts were simply unappreciated.

The same study found that a whopping 75% of employees believed their wellbeing would significantly improve if their superiors would simply show them more appreciation.

Do your employees feel valued? Are their efforts noted or praised?

When you NEED one of your team to go the extra mile, an employee who has done so previously without recognition, will probably be feeling a bit less inclined…

You don’t need to shell out on extravagant gifts (though I’m sure they’d be appreciated!). In reality, a ‘thank you’ goes a long way.

Show your employee how important their work is, how important their contribution to the business is and how they’re making a difference.

Create opportunity for feedback

Don’t leave your employee stuck between a rock and a hard place.

No opportunity for feedback, leaves no opportunity to change their situation. They’ll end up feeling hopeless and powerless, seemingly leaving no choice but to jump ship.

If one of your staff is unhappy, you should know about it long before the reality of leaving the business confronts them. Opening up communication channels allows problems to be raised and dealt with, long before they develop into an ultimatum.

Be open, be receptive, be willing.

If your employee can alter the situation that’s driving them to leave, you might just change their mind…

Development Opportunities and Goals

Think about how your current role looked this time last year - what’s changed?

Have you taken on more responsibility; learnt a new skill; expanded your knowledge base?

If none are true of your employee, this could be their motivation for leaving.

Setting objectives and supporting personal development prevents staff from feeling directionless and gives them a goal to work towards.

How much have they helped develop your business? Isn’t it time you gave back on that investment?

Flexibility

Working from home felt like a luxury to many before the pandemic, but now, it’s an expectation.

From a recent poll of the UK’s 50 biggest employers, it was found that 86% do not plan on bringing staff back to the office full-time.

Are you still sticking with the strict 9-5?

A rigid working pattern might work brilliantly for you, but it could be affecting your employee’s work-life balance.

Not providing this ‘benefit’ puts you at a serious disadvantage to competing businesses, and naturally, could cause your workers to look elsewhere…

Ask them what THEY want!

It sounds simple, but you’d be surprised how often this is overlooked.

Talk to your employee, put the ball in their court. Find out what makes the employee tick, what they value, and ultimately what they want to achieve.

If both parties are willing to have an open and frank conversation, you’ll uncover the reasoning driving their decision to leave.

Only once a problem is identified, can it be solved.

Fingers crossed…

We hope that one of these options brings a mutually beneficial solution to you both, helping you secure your most talented employees.

If you need further help, support, or expert advice in managing challenging situations like these, get in touch.

5 tips for building a startup culture your people will love.

‘A company’s culture is the foundation for future innovation. An entrepreneurs’ job is to build the foundation.’

Brian Chesky, Airbnb

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Over half of the British workforce want to start their own business, and there’s plenty of things for them to consider before they start. Creating the right culture is one of them. Unfortunately, culture is not something you can buy; it’s more complicated than that. A company’s shared values, attitudes, goals and practices create its unique culture, and it’s essential to get it right. If a great culture can enhance employee motivation, engagement and reduce retention, imagine the impact of a negative culture. So how do you create the right culture for your startup? Firstly, remember that every company is different and no disrespect to you, but what works for Google or your startup competitor, may not work for your business.

Here are some top tips to consider.

1 – Embrace your youth

Startups are young, they’re developing, and they’re open to options. One of the great things about a startup is that the culture is new, and therefore you can shape it. You don’t need to rid the culture of old habits or bad practices, because you have a blank page. So, consider what’s important to you and create values that support your goals and attitude.

2 – Define your values

Values help create your startup’s identity, and they pave the way for the company’s beliefs and culture and influence hiring decisions and behaviour. Therefore, it’s essential to consider and define your company values before you start developing your business. Then, you can ensure they’re lived and breathed from within!

3 – Consider who joins

A candidate may tick many of your recruitment needs, but if they don’t buy into or support your startup values, they may not be a fit. And it goes both ways; some people may not consider you a cultural fit for them! So, when you hire, carry out a thorough evaluation (through interviews or a combination of assessments) to ensure that you can fairly assess their suitability and cultural fit.

4 – Speak to your people

It’s essential to build a culture of engagement, open communication and a culture where people aren’t afraid to speak up. Employees need to feel loved, and recent data showed that only a third of employees felt like they belonged in their company.

You can gain regular feedback from employees to gauge how happy they are and action results where necessary. While you’re at it, ensure each individual understands their role and how it fits into the wider business. And it may sound obvious, but don’t forget to update your people on company wins and news and praise individuals for a job well done.

5 – Lead by example

No pressure, but you have to be a role model for the culture you’re creating. Live and practice your values, speak to your people and take pride in your behaviour. If you’re rude, consistently late or dismissive to your team, then that’s the culture you’re encouraging. Remember that old classic, ‘walk the talk’? It goes a long way.

Culture isn’t formed overnight; it takes time to cultivate and mature, a bit like a fine wine. It’s up to you to be patient, nurture your culture, keep an eye on it and review it over time. Pulse surveys can give a good insight into the culture as can longer employee feedback surveys when the time is right. And finally, remember that your company values may change over time, so assess these to ensure they still fit as the business develops.