Why Bumble's unlimited paid time off isn't as great as it sounds

The ability to take unlimited time off from work is a dream come true for many workers. For 700 employees at the dating app Bumble (BMBL), however, it’s a reality.

Bumble said the pandemic had made the company “reflect” on the ways people worked. "It's becoming increasingly clear that the way that we work, and need to work, has changed and our new policies are a reflection of what really matters and how we can best support our teams in both their work and life," said Bumble president Tarek Shaukat.

The option to take unlimited paid holiday days is dependent on staff still managing to complete their work – and time off has to be approved by managers. The move was announced alongside a raft of other changes, including a plan to close the office twice a year and a minimum of six months paid leave for the birth, adoption or surrogacy of a child.

Watch: Bumble gives employees week of paid vacation to de-stress

In recent years, a number of high-profile firms have begun to scrap traditional annual leave policies in favour of letting employees take as many holidays as they like. Several years ago, Netflix (NFLX) introduced a “No Vacation Policy” which essentially puts employees in charge of deciding for themselves when to work and when to take a break. Songkick, Glassdoor and the Virgin Group have also brought in forms of unlimited vacation too.

From an employee perspective, an unrestricted holiday allowance is the ultimate perk. However, critics say unlimited time off might actually deter people from taking holidays. So are traditional annual leave policies a better idea?

Read more: A week off to de-stress: Should other companies follow Bumble's example?

Having control over your time off is believed to make workers happier and help them create a better work-life balance, allowing them greater control over when they take breaks. And when workers are entrusted by their employers to make their own decisions, it is also believed to help foster a positive working environment.

Unlimited paid time off is also thought to be beneficial for businesses too, despite fears over workers disappearing for long trips away. These policies are also thought to make staff more productive and reduce stress from overwork, reducing the number of sick days taken by employees. Flexibility also helps companies attract and retain employees, lowering staff turnover. According to The Balance Careers, a reasonable leave benefit is one of the top perks that an employee wants.

Of course, offering unlimited holidays isn’t a feasible option for all companies. For those with very large numbers of employees, tracking individual and collective leave would be extremely difficult.

Watch: Bumble CEO hopes female-led firms become the 'norm'

In addition, some businesses that have introduced limitless time off have actually reported staff taking fewer days off too. When the software firm CharlieHR was founded in 2015, every employee received unlimited, fully-paid holiday days. In 2018, however, chief operating officer and co-founder Ben Gateley announced the policy was being dropped.

One key reason was that staff were simply not taking the time off they were entitled to, which he put down to a psychological quirk. “Putting a numerical limit on holiday time has a counterintuitive effect,” Gateley explained in a blog post on the company’s website.

“If you are given 25 days of holiday that are yours to take, then you are subconsciously motivated to take them. It's some kind of psychological quirk of ownership – when something belongs to you, then you immediately value it far more highly. Whereas the lack of a number – the very concept of unlimited – potentially meant you didn't value that holiday time in the same way.”

Although unlimited holiday policies aim to reduce stress and lower the risk of employee burnout, the reality can be quite different. Many people feel guilty about booking too much time off, which can lead to anxiety. When holiday allowance is very flexible, people may feel comfortable about deciding how much time they should actually take off.

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Employees may worry about taking too much time off and being penalised, so end up taking less time off than they would if they had a set 28 days of annual leave. In a 2017 study, the HR firm Namely found that employees with unlimited vacation plans take an average of only 13 days off per year, whereas traditional plan employees average 15 days annually.

There will also be times when companies need their staff to be available, too. But if one worker’s holiday is approved and another person’s isn’t, it can lead to feelings of resentment and frustration. Some companies may have found a way to make unlimited holidays work for them, but it is not a simple process - and may end up being a counterproductive way to boost employee wellbeing.

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