'Unlimited Paid Leave' Introduced by Netflix in 2004
US Companies Offering Unlimited Paid Leave to Attract Talent
Korean Companies Like HYBE and Toss Operating Unlimited Paid Leave
In 2004, Netflix, the world's largest video streaming service (OTT) company, introduced an 'unlimited paid leave' policy. Reed Hastings, who introduced this policy, set the tone by taking six weeks of vacation himself during his tenure as CEO. Since then, more companies have been adopting unlimited leave policies.
The 'unlimited paid leave' policy literally means that employees can take leave without complicated approval procedures or reprimands from their supervisors. Since Netflix's groundbreaking introduction in 2004, companies such as Microsoft (MS), General Electric (GE), and Dropbox have also adopted this system.
The core of 'unlimited leave' is that employees can take time off without complicated approval processes or criticism from their bosses. Rather than irresponsibly taking months off, employees using unlimited leave develop a sense of trust that 'the company believes in me,' and this trust increases motivation for work.
Currently, overseas companies implementing unlimited paid leave include not only Netflix, Microsoft (MS), General Electric, and Dropbox, but also ▲enterprise software developer Workday ▲accounting firm Grant Thornton ▲software company Kronos Incorporated ▲ride-sharing service Uber ▲Virgin Group ▲Glassdoor ▲KeepTruckin ▲GitHub ▲Stitch Fix ▲SADA Systems ▲Monetate ▲Procore Technologies ▲Prezi ▲CoverMyMeds ▲Goldman Sachs, among many others.
Annual Paid Leave Not Guaranteed by Law in the U.S.... Companies Must Offer Leave to Attract Talent
The unlimited leave system is also analyzed as one of the measures to secure talent. The United States is one of the few countries in the world that does not legally guarantee annual paid leave, and without excellent talent, company growth becomes uncertain.
The reason Kronos introduced unlimited leave was also due to difficulties in recruitment. CEO Aaron Ain asked the HR department for ways to enhance recruitment competitiveness, and one of those was the unlimited leave policy. Additionally, unlimited leave reduces turnover rates, lowering the costs associated with rehiring.
Of course, some companies have abolished unlimited leave after adopting it. The crowdfunding company Kickstarter abolished its unlimited leave policy in 2015 because some employees ended up taking less leave than before. Employees were hesitant to take leave, worrying whether it was truly acceptable to do so.
South Korea Starts Movement Toward Unlimited Paid Leave
Meanwhile, in South Korea, movements to introduce unlimited paid leave are emerging. In line with the era's emphasis on work-life balance, more companies are adopting unlimited leave policies.
According to the results of the 'Changes in Youth Awareness through Social Surveys' by Statistics Korea in September, the proportion of young people valuing work-life balance has steadily increased. In 2011, one in three (29.1%) responded that work-life balance was important, but by 2021, it had increased to one in two (45.4%). Companies are diversifying welfare forms in response to changes in youth awareness.
According to the job posting site Saramin, companies in South Korea that have introduced unlimited paid leave include ▲SmartStudy ▲HYBE ▲Viva Republica (Toss) ▲Hunet ▲Linde Korea ▲Raonak ▲Skin Idea ▲CM Tech ▲The Swing ▲Addiction, totaling 220 companies.
However, unlike the U.S., South Korea's Labor Standards Act guarantees 15 days of paid leave annually to workers who have worked for more than one year and have attended work more than 80% of the time. Due to the conservative corporate culture deeply rooted in society, it is analyzed that it will take a long time for unlimited paid leave to be adopted throughout society.
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