Octopus Energy is a company of very few processes. We famously (or infamously, depending on your stance) have no HR process. The approach is pretty similar to Netflix in that way - you create a culture of trust and responsibility and then remove processes that waste time and money in order to improve productivity and efficiency. Occasionally you get instances where people abuse a system, but they’re few and far between. When calculated as a whole, it’s a massive net gain.
One of those processes is the holiday policy. We have a standard number of days written into the Octopus employment contract, but it’s never followed. People are allowed to take as little or as much holiday as they like.
That sounds like something that everyone would abuse
We certainly wouldn’t be able to run a process like this if people routinely left for four months at a time, but thankfully we haven’t had that issue. It’s important that people are invested in what we’re doing and return the trust the company provides by not doing that.
In fact, the issue is the opposite of what you’d expect - people don’t take enough.
There have been a few profiles covering places that have tried unlimited holiday and realised that it didn’t work for them. The BBC covered CharlieHR’s three year experiment with unlimited holiday, and their response was pretty interesting:
There’s a huge amount of anxiety about not knowing the limit. A bunch of our team came to us and said: ‘Actually we’d love to know where the line is. Is it okay to take 35 days? Is it okay to take 25 days? Where should I draw the line?’”
Ben Gateley, the CEO & Co-founder of CharlieHR, had an interesting follow-up in his own write-up:
If you are given 25 days holiday that are yours to take, then you are subconsciously motivated to take them. It’s some kind of psychological quirk of ownership – when something belongs to you, then you immediately value it far more highly.
This makes sense - ‘unlimited’ means there’s all this possibility, and so much choice, that you never actually choose. If you’re offered “use it or lose it”, you typically use it. In doing that, despite its rigid structure, it ensures people are taking a sensible amount of time off to rest and recover.
The lack of a number – the very concept of unlimited – potentially means you don’t value that holiday time in the same way. You have all the time off in the world, and all the time to take it in… so you don’t.
All of this is before you take the work itself into account. My team have often heard me say that there’s “never a good time to go on holiday at Octopus”. By this I’ve always meant that we have something exciting and pressing on all the time (sometimes many things) so not to worry if going away clashes with something. The problem is, in saying that, I’m indirectly saying that taking time off will be problematic. I may not mean that, but that’s what people hear.
However, I don’t believe that imposing a “use it or lose it” holiday policy with a set number of days is a solution to the above. No two people are the same, so the idea of us arriving at any number of days that would solve this problem across the board feels unlikely. Instead, I believe the solution lies within the freedom of unlimited holiday, just with more support:
As a manager, set an example
Firstly, you have to look inwards. I haven’t set a good example for my team when it comes to holiday in a while.
I took no holiday in the first three years of Octopus’ life. It’s not glorified, because it can’t be. I loved my job and had no work/life balance. I looked forward to working every day and burned out twice a year like clockwork. Then I built a team and resolved to never have them do that, even if they wanted to.
Whilst promising that though, I didn’t start taking loads of holiday. What I should have been doing was taking loads and talking loudly about it. Without that, whether I want them to or not, people will try and impress me by always being around. I commend their commitment, but without rest they aren’t bringing their best selves to work - I’d know… Working with your mind pre-occupied on that errand you haven’t run, or struggling through after a poor night’s sleep may count towards more hours worked, but the quality will be down.
Now I take holiday frequently and talk loudly about it. I take weeks to spend quality time with my fiancé. I take long weekends to relax and days to help my mental health. “Do what I say and not what I do” didn’t work, so my hope is that this will.
In the write-up I mentioned above, Ben Gateway also mentioned that unlimited holiday opened the door to unfairness - if one person takes 20 days and another takes 30, the person who took 20 is left covering the extra 10 days that the other person took off. That’s certainly one way to look at it, but in my opinion it’s also an ever-present reminder to that person taking 20 that they should be taking more time off. If one of the main issues about unlimited holiday is that people aren’t motivated to plan holiday given how much freedom they have, nothing brings it back into their mind quicker than seeing others take the time off. That’s why:
We have no upper limit, but we have a lower one
A common negative associated with unlimited holiday policies is that, when faced with infinite days and possibilities, the decision paralysis means that people take hardly any holiday.
That’s why we have imposed a “lower limit” of 23 days that you must take each year. I’d love people to take more than that, but the choice to do so is theirs. However for all intents and purposes, taking less than 23 days holiday each year is seen as a betrayal to themselves and Octopus. Without that time off, there’s no way that they could be bringing their best selves to work in my opinion. For us, this combats a lot of the concerns around people not taking time off when faced with the infinite number we offer, whilst not stopping people from taking those extra weeks that they choose to take.
Be as flexible as possible
I’ve often found that it’s as much about when someone asks for holiday as it is about how long it is. Often we need time on short notice, in order to take advantage of a last minute flight deal or change in schedule. It could just be that someone has suddenly reached the point where they really need that trip they’d promised themselves right away instead of a couple of months from now. That’s why our holiday policy has no fixed notice that someone has to provide - we just use our best judgment on how to handle each unique case as it arises.
This may seem a little scary and unquantifiable, because it is. However, every request I’ve had on short notice has factored in what that person has got going on work-wise, usually with a small concession on the company’s part, such as getting someone else to handle the follow-up on a new feature going out, or working on an improvement for it.
Every person in the team is happy to help with things like this, as they know that they’ll get the same treatment when they need it. It all comes back to what Greg mentioned to the BBC in the link above - if we pass off this sort of stuff to a third party, or drown the whole process in bureaucracy, you make what should be simple needlessly complex and stressful. You don’t react to what someone needs simply because a process someone wrote down a while ago says that you can’t.
Not being flexible in this way also throws up a problem with less quantifiable consequences - how many people are taking sick days with even shorter notice because they know that their holiday policy is too restrictive? Food for thought…
Ask about holiday plans in catch ups
There’s a good chance that people can lose sight of how long it’s been since they’ve taken time off if they’re deep in a feature. Because of this, every manager is encouraged to check what holiday their developers have taken and have planned when they catch up. If it’s under our lower threshold, they make it a priority to organise their workload to free up time for them to take.
Don’t chain major projects together
I mentioned above that there’s always something crazy going on at Octopus, which makes it so tricky to tear yourself away. A similar point was raised in the CharlieHR write-up about why people didn’t take holiday:
“People are pretty bad at taking holiday, we’re all scared to do it because we have to do our handovers and pass stuff over and meet deadlines and so we actually saw a reduction in the amount of holiday people were taking.
For this reason, we try to avoid someone going from finishing a big project to starting another big project without a rest in between. That was my issue during my early time with Octopus, so it’s a priority for me. If handovers are a blocker in taking holiday, it stands to reason that the best time to take time off is before you start another big piece of work.
Recently, I’ve promised someone a major project as long as they take at least a week off between it and what they’re set to finish, otherwise it’ll go to someone else.
Thanks to our growth, we now have the team to support one another. As the person that has a clear view of what everyone is doing, and will do in the future, I need to flag moments where overworking can creep in.
Put people over projects
My final note is that, even after all of the considerations and plans above, it still comes down to a choice of what is most important - the work or the worker. There will be times when the needs of the person clash with the needs of the business, and it’s important to ensure that you put your people before anything else. On many occasions, people will work the extra hours that a project needs to get it over the line, so when the time comes, the business needs to repay that debt.
I feel like this debate has the potential to be endless. We’re lucky to have an incredibly low turnover rate, which I’d like to think is down to the mission we’re all aligned on achieving, but we can’t rest on that and ride people into the ground.
The last thing I’d want is someone leaving due to burnout and nothing else. Amazon offering to double their salary is something we can’t control and we won’t even try. People getting tired and falling out of love with what we do, however, is something that we can. That’s why for us, maintaining our trust in people and providing them with freedom without restrictions is paramount for us as a team and a company. It needs to be adopted by everyone (managers included), and a watchful eye to make it succeed, but it’s worth it.