People Feature: Can unlimited leave give Asia's fund execs a break?
Article published on March 7, 2018
By Ysrael Dumasig
Unlimited vacation policies have more commonly been associated with technology companies. Netflix and LinkedIn have both offered employees this benefit in recent years.
In the asset management industry, the policy is virtually unheard of, especially in Asia where the workaholic culture in many markets means constantly being present in the office, available or even forgoing annual holidays to demonstrate commitment.
That was until BlackRock decided earlier this year to roll out an unlimited time-off benefit to all its global offices.
Straddling two industries
The U.S.-headquartered firm rolled out the policy at the beginning of January to its regional offices in Australia, Hong Kong, India, Japan and Singapore. By the end of this year, the policy will also be implemented in all its other Asia offices, which include China, South Korea and Taiwan.
The unlimited time off is offered to everyone in the company, even new employees, with no official strings attached. The idea was borne from annual employee surveys, in which staff indicated such a policy would be beneficial.
Donnell Green, BlackRock
“We believe in managing performance, objectives and outcomes; not managing time off,” says Donnell Green, BlackRock’s Hong Kong-based head of human resources forAsia Pacific.
While BlackRock has not set limitations for the policy, Green says that the firm believes and trusts that its employees will be responsible enough to ensure their work performance wouldn’t suffer.
In this context, she prefers to describe the policy as “responsible time off in a high-performance culture” rather than just a policy of “unlimited” leave.
A primary reason behind BlackRock’s initiative is that it views itself as both an asset management company and a technology firm at a time when the two industries are becoming increasingly intertwined.
With the company hiring staff from a technology background, BlackRock hopes more top tech experts might consider working for an investment management company rather than Google, Apple or a start-up they hope will be the next big internet giant.
“It’s very important for us to stay competitive with other technology companies, so we want to make sure that our benefits are in line with where the other tech companies are to ensure we retain and attract top tech talent,” says Green.
Will it be effective?
More than in other regions, many professionals in Asia choose not to take full advantage of their vacation benefits, and some markets in the region work the longest hours in the world.
South Korea consistently ranks in the top two or three hardest-working nations in the world, according to an annual study by the Organisation for Economic Co-operation and Development.
A 2016 survey by U.S.-based marketing insights and consulting firm Northstar, titled “Vacation Deprivation”, showed that, while South Koreans are given 15 days of vacation leave, on average, employees take only eight, the least among the 28 countries surveyed.
Meanwhile, in Japan, employees are entitled to 20 days of vacation but take only 10. Malaysians take 12 of 16 possible days, and Thai workers take 12 of 15. Only those in Hong Kong – who at 14 have the lowest number of vacation days allotted – make use of all available vacation leave.
In Japan, some fund companies have taken a different route to solve this problem, forcing compulsory holidays on their overworked staff, as reported.
So, while longer holidays are very much needed for fund professionals, introducing an unlimited vacation policy effectively so that employees feel they are able to take more time off when they need may not be so straightforward.
Right now, BlackRock is encouraging its staff to take advantage of the policy and even asking senior leaders and managers to lead the way and have a dialogue with their staff about how the policy can work.
But it is too early to say whether or not employees will actually make the most of the policy or in fact will end up taking less time off, says Green.
The ultimate aim is that the policy will allow employees to “refresh” and replenish their energy reserves when they need to so they could in fact end up being more engaged at work and continue to meet expectations.
Other management and hiring analysts in the industry point to difficulties in implementing an unlimited time-off policy and suggest that employees may be unlikely to make use of the benefit.
Greg Kuczaj, Hong Kong-based director at Willis Towers Watson (WTW), says it’s unlikely that other fund houses in Asia will follow suit. He notes that an unlimited vacation policy comes with an additional challenge of managing perceptions.
Introducing an unlimited time-off policy could raise anxiety among employees about how much time colleagues are taking off, and some may worry that taking too much time off would leave a negative impression.
“People don’t want to be seen as that guy who takes too many days off,” says Kuczaj.
But this is where strong team dynamics and consistent communications will be vital for the success of the policy, according to Kuczaj. Other firms that consider implementing such a policy must discuss it thoroughly with the entire workforce to address any parameters for the unlimited leave, any reservations and what is expected of the employees in return.
BlackRock’s Green similarly thinks that, for the policy to be successful and maintain uninterrupted investment services for clients, teams must have close cooperation and honest conversations about the work that needs to be done and what amount of time can feasibly be taken off.
“The expectation would be the team is working together to provide the performance for client,” she says.
A policy not for everyone
Will Tan,Singapore-based partner at Principle Partners, says it’s reasonable for tech firms to offer such a benefit to their employees, as the industry usually has a high turnover rate.
But what works for the tech industry might not work for those in the financial services and asset management industry, henotes, and will take some time even if such a policy catches on among asset management companies in the region.
Fund firms should be clear with the guidelines and restrictions if they do decide to roll out the same policy, and they may be better off factoring in length of tenure, individual performance and function when considering to whom they should offer the said benefit, says Tan
“It can’t be given to just anyone,” he argues.
It makes more sense, for example, to offer such policy to a person who has been working with the company for five to 10 years than to someone who has just joined the team, as the former had probably brought more value to the company. It could also be extended to others under special conditions, such as extended study leave, Tan adds.
The effectiveness of unlimited vacation is also dependent on having a large enough workforce.
It would be much more difficult for smaller firms, for instance, to manage covering for those employees who are on extended vacation, says WTW’s Kuczaj. Larger, more institutionalised firms are in a better position to do it, as they have a greater headcount and probably have succession planning already in place even before rolling out the policy.
Kuczaj says there are other ways to provide people with more flexibility, starting for instance with offering maternity and paternity or honeymoon leaves. For some roles like administration support and middle- or back-office roles, working from home could be a great alternative too.
Ken Cogger, Nikko Asset Management
Ken Cogger, Nikko Asset Management (Nikko AM)’s Tokyo-based head of human resources, says that, while an unlimited vacation is an interesting proposition, what is really important is to be able to provide an array of benefits that better meet the wide range of needs of their staff.
“Not everyone prioritises leave as the number one benefit from their employer,” he says.
From an employer’s perspective, firms should recognise that what people look for is a stable work environment that also offers flexibility. In an article by WTW published on Apr. 4, 2017, Cedric Luah, head of health and benefits for Asia and Australasia, says that, in Asia, flexible work arrangements are key to attracting the right talent.
“Employers are beginning to recognize the need to segment the workforce, for example by age group, in order to meet workforce needs appropriately,” Luah says in the article.
When asked if Nikko AM will follow suit and offer unlimited leave policy in the future, Cogger say it’s not off the table, as it does give employees a sense of freedom along with an increased sense of accountability. But it’s not a top priority either, he adds.
Any well-managed team should be able to operate even if not everyone is in the office for a given period of time, he says. “If that is not the case, there’s an issue with how teams are being managed within the business”.