Unlimited Sick Leave as a Retention Strategy?

More frequently we see companies implementing unlimited sick leave policies. Although this is often big companies that receive media attention, it can certainly work for smaller companies too. With the struggle to retain great staff being an emerging theme at the moment, we explore whether unlimited sick leave could be a good retention strategy for your business and the practicalities around this.

Market Activity

Some companies tend to refer to their “unlimited sick leave policy” as “managed sick leave policy”. This emphasises that the sick leave beyond the legal minimum 10 days is at their discretion and overseen by management.

Companies tend to find that the uncapped sick leave initiative is very successful. However, some companies will suit it better than others. For example, for companies who offer flexibility and have engaged employees who want to come to work, it will be an effective strategy and make excellent business sense for the retention and wellbeing of staff. On the other hand, for companies who have employees that view sick leave entitlements as a target or have employees who do not enjoy coming to work, it may not be an effective strategy and the policy could be taken advantage of.

Some companies reserve the right to limit the sick leave to as and when they deem it appropriate. The nature of a policy enables this, as opposed to stipulating unlimited sick leave in an employment agreement. They also tend to monitor for regular patterns of sick leave, and also have the ability to request proof of sickness if they have good reason to do so.

The reason for companies implementing unlimited sick leave initiatives has been successful because the theme of ‘presenteeism’ tends to be more harmful than good. Presenteeism is the activity of continuing to work as a performance measure and employees can be present when they are sick but do not want to have a sick day in case they are viewed negatively. However, in reality, a sick day is more beneficial to the company as the employee will recover more quickly and will be fully productive when they are at work, reducing errors and the chance of passing on illness to others. (NB: for more on presenteeism, check out our articles from last week).

Applying Unlimited Sick Leave in Your Company

An option for your company is to provide completely unlimited sick leave for all employees. However, this comes with its consequences as mentioned above. A cautious and preferable option is to grant additional unlimited sick leave at managerial discretion; this will enable your company to regulate the use of sick leave.

In order to determine what circumstances sick leave should be granted for, you may like to consider the following guidelines for managers:

• Ask for the reason that the employee is sick. If it is for a sick family member, you could ask them to work from home if that is an option.
• Grant additional sick leave (beyond the 10 days) for the employee only. So, if an employee’s family member is sick, they must use one of their 10 days sick leave for this, but unlimited sick leave can be used for only the employee themselves.
• Require a medical certificate. Employers have the right to request proof of sickness from the first day of sickness if they have a good reason. This is a great option if a manager has reasonable suspicion that the employee is taking advantage of the unlimited sick leave.

In addition to this, you may like to monitor patterns of sick leave use, such as the regular taking of sick days on specific days of the week such (eg. Mondays and Fridays) or short but frequent use.

If you would like to introduce an Unlimited Sick Leave Policy, give one of our team a call and we can discuss pragmatic options for your business.