Work Culture

Ditch the unlimited leave policy (& why we did it)

By on May 17, 2018

Startups are amazing for a number of reasons. Just to name a few –

  • thrill of working on something exciting
  • anticipation of sky-rocketing growth
  • rewarding work culture
  • bean bags, unlimited leaves 🙂

The last bullet point, isn’t one of those ‘real reasons’. But there lies the perception. People think bean bags & unlimited leave policy is the work culture. Clearly, they lack the first hand experience. And are probably driven crazy by ‘dictatorial culture’ at their workspace.


Let me take a step back & explain the context here. We are a start up based out of India. And as other startups would say, we thought it’d be cool to have unlimited leave policy in place.

Some time back, we even wrote about how good it felt. A couple of years down the line, that unlimited leave policy is a thing of the past.

Unlimited leave policy, a failure ?

We adopted the unlimited leaves policy right from the beginning. That was not only a ‘pitch’ for the potential team members, but also it saved us the admin overhead. Tracking, approvals were informal. No need of a leave management tool.

Starting up is tough, the team literally has to fight for survival.

The team was so driven, that the only leaves taken were due to sickness. In the short run that could be a good thing – people work long hours, are rarely absent etc. But in the long term, this would definitely lead to burn out. We realised that in the 2nd year of the policy.

That is when, we realised that leaves taken by a team member (on an average) were substantially less. Of course, there were some exceptions – but too few to increase the average. We had to force the employees to take some time off.

In retrospect, founders’ lack of willingness to take time off for themselves may have played a part.

What went wrong ?

After spending some time on those stats, we decided to do a root cause analysis on what really happened. Below are a few possibilities –

  • Unlimited is not a number. Thus, there was uncertainty in employees’ minds on what was a ‘fair number’ of leaves. Most of them erred on the side of caution by taking less number of leaves.
  • Employees give their time to the company & the company in return rewards them financially & intellectually.  This social norm of ‘give & take’ that drives the society was suddenly taken away & the team did not know how to react.
  • In a high work load environment (especially in start ups), it is near impossible to find the ‘right time’ for time off.

Must haves for making unlimited leaves work

The unlimited leave policy, per say, is not at fault for the failure. But there are some must have conditions, to definitely make it work. In our case, we didn’t meet some of those. And that is why the adoption failed.

  • Cultural guidance from senior management. Without this, the adoption of unlimited leave policy almost always results in – employees taking less number of leaves.
  • Tracking leaves. Even if they are not going to be measured, ensure that all leaves are tracked. This avoids a sense of guilt in employees that may occur due to non-tracking.
  •  Clear guidelines surrounding the policy. Unlimited leaves do not mean no policy. Without clear guidelines, taking time off becomes a matter of trust between employee & the manager – say experts.
  • Sufficiently large team. Companies with handful of individuals always tend to slip up.
  • Statistical analysis of leave patterns by employees should point to the right results. Don’t just go by what people say. They don’t know they are burning themselves out.

While we may have failed in adopting the unlimited leave policy, we do not write it off. If successful, it can have a positive impact on the team & thereby the entire business.

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