Virgin’s Unlimited Vacation Proposal

Posted By on September 21, 2014

On Tuesday 23rd September, Richard Branson announced a bold new step forward for Virgin in a blog post on their site.

Flexible working has revolutionised how, where and when we all do our jobs. So, if working nine to five no longer applies, then why should strict annual leave (vacation) policies?

You could hear the nervous squeaking of thousands of HR staffers chairs around the world. He’s introduced a potential chaos to his business. Or has he? If you look into this a little deeper then you can see that this this vacation (un)policy has some distinct boundaries:

  • All (salaried) staff can choose to take off whenever they want for as long as they want
  • They do not need to ask for prior approval and none will keep track of their days away from the office
  • The employee can decide if they want to take a few hours, a day, a week or a month off
  • But, and here’s the really important part of the deal, they must ensure that they are up-to-date on every project and that their time away will not in any way damage the business

In one expert move he has built a trust and accountability economy within his business. Employees must be really happy with this change. More importantly they must feel like senior management trusts them to do the right thing and this could deliver even better results and continued happiness (even in tough times). A lot of companies still feel scared to take bold moves like this and oftentimes they fight a constant battle with keeping morale up and actively building trust. Author, Stephen M. R. Covey, summarizes very nicely why a level of internal mistrust is harmful to businesses:

When trust is low, in a company or in a relationship, it places a hidden “tax” on every transaction: every communication, every interaction, every strategy, every decision is taxed, bringing speed down and sending costs up.

Also, back in 2010, a study by Watson Wyatt showed that high trust companies outperform low trust companies by nearly 300%. That’s not just significant, it’s game changing. By actually trusting people to do the best by the company, Virgin will not only get stronger but they will increase advocacy, closeness with the leadership and faith in the operations of the company. This should result in increased efficiencies and profit.

Businesses that aren’t looking to evolve like Virgin will likely erode employees trust and the implied lack of flexibility will result in them being unhappy at work or leaving to go it alone. According to IDC, there were around 12 million full-time, home-based freelancers and independent contractors in America in 2011 and they predict that there will be 14m by 2015. That’s quite the growth. This indicates that there is less fear in the unknown and freelancing is a real option these days. Sharing and collaborative platforms, like freelancer.com, are enabling employees to see a new world where it a lot easier to stay busy, make money and work to your own schedule. I actually wonder when companies like Virgin start to see opportunities in this as well and using more on-demand resources for everything in their business using talented people that have fled unresponsive companies?

I do feel that Branson is a little late to the game with this move but also think that this is just the first stage in a wider transformation for Virgin. It will be interesting to see how this manifests over the next 12 to 18 months. I have a feeling that we won’t see abuse of this policy and that people will even adhere to the current structure they are used to and will not feel pressure when asking for time away.

My advice is that if you are a business leader then you need to start paying attention to moves like this. If not, then you will start to suffer as trust gets eroded due to closed management, the impact of the sharing economy, employees taking the freelancer route, new competition and consumers demanding more from your core products and services.

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Note: article originally published on Huffington Post.

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Nikolas Badminton is a world-respected futurist speaker that researches, speaks, and writes about the future of work, how technology is affecting the workplace, how workers are adapting, the sharing economy, and how the world is evolving. He appears at conferences in Canada, USA, UK, and Europe. Email him to book him for your radio, TV show, or conference.


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