Flexible paid time off – overcoming the challenges
Flexible time off can be a magnet for talented candidates as well as a way to avoid burnout and reduce employee churn. On the other hand, though, the policy itself can lead to even more stress and confusion. So how to implement it in a way that is beneficial to the company?
The right to the paid day off is taken for granted for most developed countries. In the European Union, every member country has a right to decide about the minimal number of days the employee can take. The numbers vary from the maximum amount of 30 days in Sweden to 20 days in countries like Poland or Greece.
The number of approximately 20 paid days off is common throughout developed countries at all, including states like Argentina (up to 20 days), Brazil (up to 30 days), or South Africa (up to 25 days).
There is a limit of ten days in Canada (with a notable exception of Saskatchewan province with 15 paid days off. Japanese employees enjoy ten days off while people from Mexico have approximately six days off.
The United States is the only developed country with no paid leave days guaranteed.
The costs of overworked employees
There are multiple benefits of taking the time off, from unplugging from the daily work and getting back with a distance, to recovering and spending time with the family. That’s why giving the employees the time to recover and actually paying them for not working for some time is beneficial for the company.
The productivity drop resulting from being overworked is a fact. According to the Psychology Today – published study, unused vacation time costs US companies up to $224 billion a year – shrinking productivity and lack of creativity can be drowning. Also, the overworked employee is going to take leave days sooner or later – due to burnout or sickness. In the long term, working too hard is not paying off.
So how much time is the best number for days off? The best answer is “it depends”. And when it comes not to the theory and pointless sentences with no real impact on reality, the best option is to offer flexible time off.
What is a flexible time off (or FTO time off)
The flexible time off is the practice, where there are multiple types and options of taking the day off the work and still getting paid. It is common to use a flexible time off and unlimited vacation interchangeably – and it can be correct sometimes. But on the other hand, it is not exactly the truth, at least not always.
The unlimited time off is truly unlimited – there is no upper limit of leave days the employee can take.
But putting a limit on paid days the employee can take is not making it automatically inflexible. The core concept is to make them available, convenient, and useful for the organization, contrary to strict and limiting policies seen in multiple organizations.
The first type of flexibility comes not only from the number of days but also from giving the employee multiple types of free days to take.
Types of off days in the flexible time off
Depending on the jurisdiction and the legal framework the company operates in, there can be multiple types of free days. Some of them are mandatory in some countries, while others are completely up to the goodwill of the company owner.
- Personal leave days – the most unspecified and flexible type of leave day. Usually, all days other than these below fall in this category. It can be either a free day to attend some child’s school event, have some personal time for family or treat a hangover.
- Grieving – a day granted when someone from a close family dies and the employee has to attend the funeral. Although rarely taken, this type of leave can be a game-changer when needed.
- Vacation days – a period of time that enables the employee to rest and recharge. It is usually the top-of-mind type of paid leave one has in mind.
- Paid sick leave – another type of vacation that is common in most developed countries, yet not-that-obvious in the US. The situation takes place when the employee gets sick and the employer grants him or her additional days off, usually for a slightly lower wage. The policies can be granted as an employee benefit, as a social security benefit, or as a mixture of both.
- Absences – another type of days off that, contrary to the personal leave day or other form described above, are notified post factum, not in advance.
- Parental leave – this type of leave is usually a part of a social security system. It is a time granted for a parent who wishes to take care of a little child. The length of time depends on the legal framework in the country.
- Incomplete leave – sometimes it is not necessary to take a whole day off. Four hours or two can be sufficient and the ability to take only a few hours work (and clock in for a part of a day)is the first step toward flexible work time.
While some types of leave days are up to the employer, some types are forced by the social security system or the law. On the other hand, though, there can be multiple types of contracts in one legal system that entitle the employee to take more or fewer days off or types of leave.
With multiple types of leave days and the number of each of them, the company can find it challenging to not change the flexibility of leave management into chaos. But that’s not impossible though, at least if the company follows the rules.
Management challenges with flexible time off
What can be considered a haven for an employee, can be easily turned into hell by the improper management and lack of transparent culture. To make the flex time off work for the benefit of the company it is crucial to:
Knowing what is acceptable (and what’s not)
To get the best of the flexible days off, the employee needs to take a day off – trite but true. While the time off can be technically unlimited or there can be a huge amount of multiple leave days to take, there are a myriad of factors that influence the daily work in the company.
The top of mind example – a workaholic or single and career-oriented manager can set a pressing example for the team. The tension can be even greater when there are employees with families and kids in the team, who need to take leave days more often and due to numerous unpredictable circumstances like a child’s sickness.
Also, while leave days can be unlimited or there can be many of them, the company expects the work to be done. Thus, taking leave days just before the deadline or in the middle of the life-or-death type of project can be unacceptable.
In the end, the company can have flexible days off with no employee brave enough to take advantage of it.
First and foremost, the company’s management needs to give an example and take days off, not work themselves to death. So if the owner skips a day or two and the world does not fall apart, it is a clear signal for the rest of the company.
But sometimes this signal is not strong enough. In that case, an additional incentive can be required. In Evernote, a company offers a $1000 boon for every employee who takes at least a week off. In a workaholism-loving world of high-tech companies, encouraging the employees to take days off can be the only way for them to actually do that.
On the other hand, though, there should be a good guideline that shows the encouraged and forbidden practices – more can be found below.
Ensuring the smooth flow of the information is critical in delivering a flexible time off policy. There is no problem with taking the day off – but there is a problem with doing so in an unexpected and uncommunicated way.
In other words: while there can be unlimited vacation days, there is no day to take without notifying it previously. Managers need to know who and when will be absent and project managers need to know the skills and workforce they have access to.
Last but not least – it is rather an exception when the day off is taken without prior notice. Usually, vacations are planned, there is a calendar of upcoming events and there are many ways to plan the off days up. The situation where there is a sudden and unexpected need to take a day off is relatively rare.
The key is in software. There are many time off programs (with Calamari being one of them) that enable the team to plan the days off with delivering the complete and reliable calendar to the managerial team. Also, the calendar delivered by Calamari enables the manager to decide whether to accept or decline the day off requested by the team member.
Another important feature is to deliver integrations between the popular tools (like Slack, GSuite, or Office 360) and the off day management software. Reducing the uncertainty and the number of surprises in the vacation calendar is the first and the most important step toward delivering real flexibility in the day off management.
Understanding the expectations (from both sides)
Last but not least, it is challenging to deliver a flexible day off policy when both sides, the employer and the employee, don’t fully understand what they expect of each other. This applies to the policy toward the free days, the work effects to deliver and the general company culture.
The best way is to set clear rules, write them down, and stick to them. Also, it is important to collect feedback from the team and update the rules from time to time to deliver better results, and reduce what is considered ineffective.
Setting rules and following them is crucial in building a transparent and trusting culture in the company, where employees feel safe enough to share their concerns and contribute toward a common goal.
A flexible day off policy is a great benefit for employees, but in the end, even greater benefits can be gained by the company. Having a loyal, relaxed, and effective employee is the key element of building a competitive advantage – machines are available everywhere, but an experienced and flexible mind is unique and necessary for creating value.
Scaling the teams can be done regardless of their organizational structure. The key is in efficiency. The less growth-oriented the structure is, the overall effects will cost more and deliver less value added. So how to start building the team with growth in mind?
The Calamari team has cherry-picked the available reports and come up with the compendium below to guide you through uncertain and challenging times to come.