Just try taking time off.

Richard Branson's No-Vacation Policy

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
Read More.
a | A

There is probably nothing more meaningless and hypocritical in employer-employee relations than an "unlimited vacation policy" of the kind that billionaire Richard Branson has announced for his personal staff of 170. Though he cites Netflix's decision not to track vacation days as his inspiration, it is hardly the same thing, and it amounts to the total or partial abolition of paid holidays.

Netflix has never said that it offers unlimited vacation. The company's vice president responsible for the movie-streaming service's application programming interface, Daniel Jacobson, even had to explain that in his blog a year ago, because a lot of people were interested, just like Branson. The slides embedded in that post explain what Jacobson calls adult behavior: the company's policy is to trust people to get the job done in the way they see fit. "It's about effectiveness, not effort, even though effectiveness is harder to assess than effort," the policy says.

Everyone is an adult, though, and those who miss deadlines or do poor-quality work get fired, because, the company's rulebook says, Netflix needs a star in every job.

Although this policy sounds attractive, it is also quintessentially American. The U.S. is the world's only advanced economy that doesn't guarantee people a paid vacation. Netflix workers may well end up taking none if they want to keep their jobs. Disappearing for a month would definitely undermine an employee's ability to be effective.

Under employer rules that envisage a certain amount of time off each year, many people don't use it all. The average U.S. employee only uses 51 percent of allotted vacation time. Asked why, most people say nobody else can do their work or they're afraid of getting behind. But 17 percent admit they're fearful of not meeting goals or getting fired, and another 13 percent say they want to outperform colleagues.

Noncompetitive environments are bad for efficiency. Competitive ones aren't conducive to unlimited vacations: If they were instituted, workers might soon be in a race to take less and less time off. In the U.K., where many Virgin Management employees work, this will clash with a law guaranteeing 28 paid vacation days a year.

There is another problem. What if you're a process-oriented employee who has daily chores instead of deadlines? Virgin's management group has employees who run accounts on social networks, answer journalists' calls and do routine management support work. If someone with those kind of responsibilities takes a month off, one of two things can happen: Either the work doesn't get done or someone else will have to do it, and the extra workload likely won't be appreciated.

If Branson wanted to be honest, he wouldn't have invited them to take as much time off as they dare; he would have required them to use up the entire annual vacation allotment, allowing them to set the dates of their vacations. Research has shown that practice to be effective in reducing stress and burnout. Then, he would have allowed employees to work from anywhere they wanted instead of coming to the office. They're all adults, after all, and they would figure out the best way to get the job done without getting fired.

As it is, Branson looks liberal but in fact steps up the pressure on his employees. If anything, this passage from his blog reads like a thinly veiled threat:

There is no need to ask for prior approval and neither the employees themselves nor their managers are asked or expected to keep track of their days away from the office. It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel a hundred per cent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business – or, for that matter, their careers!

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net