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Paying for Staff Holidays ‘Increases Productivity’, Says Steelhouse Boss

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Workers at Steelhouse get $2,000 a year from the company towards a vacation and staff turnover at the US advertising agency is minimal.

Half of American employees struggle to take their full holiday entitlement each year – partly due to the fear they could be seen by bosses as lacking in commitment – but not those lucky enough to work at Steelhouse.

That’s because the advertising agency, based in Los Angeles, actually gives its staff money to go on holiday.
Each year Mark Douglas, the company’s CEO, gives his employees $2,000 to spend on the trip of their choice. Staff are unable to take the money as a bonus payment – they must use it to pay for a holiday or otherwise lose it.

The cash can be put towards multiple trips or just a single break and staff can do whatever they like on holiday, provided it is legal.

Workers were ‘reluctant’ to take unlimited vacation time, admits CEO

Douglas first had the idea of paying staff to take a holiday after introducing unlimited vacation time at the company in 2010, but finding his employees were reluctant to use it.

“If you have a caged lion that was born in captivity, and then you open the cage, they back up more into the cage. They don’t start running free,” he told Business Insider. “When we first started telling people they had unlimited vacation, they didn’t even know how to interpret that.”

Netflix pioneered unlimited annual leave for its staff in 2004 after employees argued that, as they did not track the unpaid overtime carried out for the streaming giant after hours and at weekends, their free time should not be tracked either.

Richard Branson introduced the benefit at Virgin in 2014 after being impressed by Netflix’s policies. Other companies, including LinkedIn and Sailthru, also offer the benefit.

On average, US employees receive just 10 days holiday a year, while British workers enjoy 25 days annual leave.

Regular holidays boost productivity and retention, says Douglas

Douglas finds that encouraging Steelhouse’ staff to take regular holiday breaks makes them more productive and that it has helped attract and retain top-quality talent. Turnover at the firm is low, with just two employees leaving between 2013 and 2016, the firm claims.

What’s more, for some months of the year the entire staff take a three-day weekend off work – known as ‘Steelhouse Days’ – with employees receiving an additional annual five days off work for each month without a three-day weekend break.

“I think it’s important that everyone be able to essentially really, truly leave work,” Douglas told Business Insider. “Everyone works pretty hard but I think they feel like there’s a give and take.”

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.