Interestingly, the scheme applies only to partners and managing directors at the firm (arguably those least inclined to utilise it), whereas it was junior bankers who last year attracted headlines following their complaints of a relentless long hours culture at the bank.
It is apparently intended that the holiday entitlement of those in the lower ranks will remain fixed, though it is understood that they will be offered an expanded number of days’ leave. This has led some to denounce the policy as unfair.
Unlimited holiday policies:
The investment bank said the scheme has been introduced to promote rest and recharge. Surely a worthy goal but, in practice, data shows that when companies implement a policy like this, staff tend to take less holiday, not more.
That is because it puts the onus on individuals to decide what constitutes an appropriate period of leave rather than the leave allowance setting a standard or expectation. Further, a policy alone may not be enough without a supportive workplace culture.
The CIPD has highlighted the risk that the Goldmans scheme could prove counter-productive and lead to more stress and burnout, rather than less.
By introducing the new policy, Goldman Sachs is following in the footsteps of tech sector employers such as LinkedIn and Netflix who already operate similar schemes. Perhaps this is a sign of where the competition for talent now lies - in benefits and flexibility in particular. But how does that square with Goldmans’ desire to get people back to their office?
It will certainly be interesting to see if other city institutions and employers start to follow-suit.
So far not many have introduced such a policy, notwithstanding the fact that the concept of limitless holiday has been around for some time.
It should also be appreciated that workers already have a significant amount of holiday entitlement under the working time regulations (5.6 weeks/28 days per year for a full-time employee), together with whatever contractual enhancements may apply.
Given the increased adoption of flexible working and the move to hybrid working by many employers since the pandemic (according to the latest ONS data, roughly a third of working adults in Great Britain now spend at least part of their time working from home), some employees may find they need to use less of their holiday entitlement to run the sort of errands that required time off in the past.
This means holiday entitlement can be used precisely for the purpose for which it was originally intended, i.e. holiday. In fact, this may be why there does not appear to be much demand for unlimited holiday and, if that is the case, why rock the boat?
In addition, taking away any regimen so far as holiday is concerned may create health and safety issues for employers if, as the data suggests, the policy works in the opposite way to what is intended for those employees who prioritise work above all else.
This could rebound on employers if stressed employees then look to bring claims.
There may also be issues inter-employee that will need to be considered.
If some staff take advantage of unlimited holidays more than others, the ones that take less holiday may feel they have to shoulder a disproportionate burden in terms of workload. This resentment may create an unhappy workforce, as well as spur other claims.
So, whilst Goldman Sachs has certainly generated eye-catching headlines with its new policy of unlimited holiday, the jury is out as to whether this might start a new trend.
Richard Fox is counsel at law firm Kingsley Napley