Flexible working can help with work-life balance, but in 2014 Virgin took this a step further by offering unlimited holiday leave to its people. Josh Bayliss, CEO of Virgin Group, explains what has happened since
When Richard Branson started Virgin in 1970, business thinking was dominated by the economist Milton Friedman, with an emphasis on shareholder returns and nothing else.
I think everybody now accepts that there is a responsibility that goes beyond just delivering shareholder returns, and that’s evident now in the choices that consumers are making and the decisions that employees are making.
Virgin’s aim of ‘Changing business for good’ is something that encapsulates all of the different elements of our purpose.
Why we introduced unlimited leave
In September 2014, we announced unlimited leave for our team at Virgin Management in the UK and the US. We want people to be themselves in work and out of work, we want them to bring 100% of who they are to the workplace, and we think we do that by ensuring that there is the freedom to be whoever they want to be.
We’ve been running that programme for just over a year, and we haven’t noticed any significant uplift in the amount of holiday that people take, but a big difference in the quantity of holiday that people take in one block. People are taking a two or three-week holiday rather than one-week, and it works effectively for them and for us.
We’ve also introduced shared parental leave between parents. Those sorts of polices which encourage people to live a more rounded life and get involved in being part of a family-run business with family values is something that we value very much.
Could an employee take a whole year off? In theory, yes – although I don’t know what you’d be leaving yourself to do when you got back! Employees have to agree with their managers that it makes sense but, in principle, any amount of holiday is fine. In reality, our people are very engaged and tend to do the right thing.
Rising employee engagement
As a result of the policies introduced since I took over in 2011, employee engagement has risen from 63% to 88%, and 95% of people say they are proud to work for Virgin.
Productivity is through the roof and financial results are markedly higher. So it’s definitely a positive story. Your HR director will hate you for even raising it but actually it’s definitely a worthwhile experiment for any business to try.
Another benefit is that staff churn is well down. The unlimited leave policy has led to a highly engaged workforce, all of whom are very clear about their purpose. I do a quarterly update for all our teams at Virgin Management around the world, and I start every update with our purpose statement and our strategic objective. You can’t remind people too many times.
It can be pretty challenging; to think about the meaning of life is an existential question, and I think we try to encourage the businesses that we work with to think about a couple of things. One is how can you enrich people’s lives. The other is, how do you think about it over the long term? Most companies have short-term aspirations.
We’ve got three very significant public companies in Virgin Group and we’re always talking to the CEOs of those companies, planning a five- and 10-year time horizon. You can’t just think about the next quarter. We admire what Paul Polman, CEO at Unilever, did in scrapping quarterly reviews.
We think short-termism is a killer when you consider things like purpose.