By Andrew Lowcock
An American company has revolutionised its holiday policy – by not having a holiday policy at all. But could this work for your business too?
Netflix allows its customers to rent an unlimited amount of movies and TV shows to download or stream online for a flat monthly fee, and have a selection of DVDs sent to customers’ homes. The company has been extremely successful at recognising the changing nature of how consumers watch movies, usurping traditional video rental store chains like Blockbuster.
Formed in 1997, Netflix started with the traditional leave and holiday policy that nearly all workplaces continue to offer today, with a standard number of days of leave per year, in return for working a standard number of hours each week.
But when employees regularly started to work after hours and sometimes on weekends, Netflix decided to do something radical and completely abolish its leave and holiday policy.
As Netflix’s ‘Reference Guide on Freedom & Responsibility Culture’ states, “we should focus on what people get done, not how many hours or days worked”. So Netflix employees can take as much time off as they want, for as long as they want, with an important proviso – their managers know where they are, and that their work is covered.
The policy has been an unqualified success: Netflix’s annual revenue now tops $US1.5billion and profit is over $US100million. They plan to expand into Canada later this year.
“Rules and policies and regulations and stipulations are innovation killers. People do their best work when they’re unencumbered,” Netflix’s Steve Swasey told the UK Telegraph. “If you’re spending a lot of time accounting for the time you’re spending, that’s time you’re not innovating.”
So, could such a policy, or rather a lack of policy, work for your company? Netflix decides to balance its holiday plan with a stated aim to only hire “outstanding employees”, essentially re-hiring each employee each year based on performance, and paying only top of market salaries. They expect exceptional output in exchange for the extra time off. They also have a large employee base to cover workers on holiday, with more than 600 paid staff.
It’s not an idea that could be uniformly applied across the business community, but this type of innovation is well worth considering at your next management meeting.
Could abolishing your leave and holiday policy potentially work for your business? Let us know your thoughts in comments below.
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The idea of staff re-applying for their positions is highly applauded. It is universally known that many workers slack off more and more as time goes by and new employees begin to feel separate with a different level of passion. The trust element is essential to output. Very big step to take but given it’s paid off it may be possible other companies begin to follow, especially with regard to family obligations being shared between Mums and Dads. Thanks for the lead.
What an innovative idea at last a company that trusts it’s workers. No wonder this is paying off for them a little trust goes a long way and being restrictive is only conterproductive in the long run. The feeling of freedom is priceless and the freeing up of policies that don’t effect a companies legal obligations can only be a good thing for everyone involved.