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Netflix took years to get its unlimited vacation policy right. But is it right for your company?

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How does the idea of unlimited time off sound to you? A few companies, most notably Netflix, have dabbled in the idea of limitless Paid Time Off (PTO), which they prefer to call a ‘No Vacation Policy’. This scheme sees employers provide employees with an unlimited amount of paid time off. Silicon Valley startups such as Netflix, Dropbox, and Github have made it a common novelty.

The Idea Behind Unlimited PTO

Back in 2004, Netflix was one of the first companies to offer unrestricted PTO. It is based on the premise that results and job quality measure performance. “We don’t need a holiday policy,” Netflix states, “just like we don’t have a 9-5 policy. You’ll always have to meet the goals and deadlines, and in a fast-paced industry like tech, they’re unlikely to slow down anytime soon.”

The Perks of Unlimited PTO

Increases employee happiness

One of the most appealing aspects of unlimited PTO is the possibility of a more flexible work schedule. Days off aren’t constantly monitored by HR, and time off is taken at the employee’s discretion. This level of autonomy allows employees to achieve a healthier work-life balance, which can lead to happier employees.

Attracts and retains primo talent

Not only in Silicon Valley but in every big tech hub, finding top talent can be difficult. Perks and incentives are significant considerations for 57% of applicants, according to a Glassdoor survey. This additional benefit is beneficial for attracting new talent, but it also can lower attrition rates.

Encourages sick people to stay at home

Paid vacation, sick, and personal days are all combined into one day of unlimited PTO. People who are suffering would be more likely to stay at home and not spread their illnesses around the workplace if they didn’t have to save days off. It will also allow those who are only partially ill to take more time off.

Creates trust

Offering unlimited PTO will help to foster a trusting community, which is critical in shaping how a company performs. Employees have more control when their time off is not monitored, demonstrating their employers’ confidence in them. They are confident that work efficiency and results and day-to-day activities will not be harmed.

The Pitfalls of Unlimited PTO

Policy abuse

One disadvantage of unlimited PTO is that it can encourage people to take advantage of the scheme. Such a liberal holiday programme would not work unless there are specific rules in place.

Unclear expectations of what’s acceptable

Kickstarter famously ended its unlimited holiday policy after discovering that employees were taking fewer vacation days. “There was no doubt about how much time off work was acceptable,” a Kickstarter spokesperson said. By defining precise criteria across the number of days, the organisation discovered employees felt less guilty about taking time off, and enjoyed better work-life balance as a result.

Pressure to take less time off

The State of American Vacation 2018 polled 4,000 American employees over 18 who had been given paid vacation time. At the end of 2017, 52% of them said they had unused vacation days. People may feel compelled to take less vacation time, or even none at all, to avoid becoming less dedicated and diligent.

Benefits employers more than employees

Employers may find unlimited PTO a cost-effective option, but workers may find it a significant disadvantage. The corporation saves money because they aren’t obligated to pay out unused sick days. Netflix uses it to considerable effect, but remember Kickstarter and how they discovered it wasn’t the right choice for them. 

Unlimited, or a stricter ration of time off? Let us know which side of the debate you’re on about unlimited PTO.

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Investor’s greed a problem, says Sankaran Naren

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Gordon Gekko might have felt that greed, for lack of a better word, is good, but that isn’t always the case. The human urge to clamour for more has caught many an investor on the wrong foot and Sankaran Naren, Executive Director and CIO at ICICI Prudential, opines that investor greed is increasing day-by-day, which is a problem.

Naren Indian equity portfolios at ICICI Prudential, and has worked with various financial services companies, including Refco Sify Securities India and HDFC Securities. Delving further into the issue at hand, he says, “We are not seeing a problem in the macro or business cycle. But investor greed is a bigger problem. They think that there is only one asset class called equity and there is nothing called risk and that is the bigger problem rather than anything else in the macro or business cycle from an India point of view. In the world, all the way from 2012, people have not seen market corrections in the US. There people are used to investing in stocks and not worrying at all about market corrections except in 2018 December and 2020 March,” said Sankaran.

At this point, he believes that it is very important for investors to practice asset allocation and that they should make choices based on earnings connected to 2021 or 2022, investing in names which have steady operating cash flows, dividend yield, etc.

“The key learning from 2007 is that investors who invested in IPOs based on 2014 earnings were in for a disappointment. There is a fair amount of froth in many parts of the markets, particularly in new-age areas. Unlike Asia which has seen periodic market corrections, since 2012, US equities have barely witnessed a meaningful correction,” said the fund manager.

“Today the number of loss-making new age companies trading at stretched valuations is very high in the US compared with dividend-paying, cash flow-generating old economy-oriented companies,” he concluded, as he offered an investment roadmap for stocks and mutual funds to a rapt audience. 

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Mercedes to slow expansion in India, opt for direct sales

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In what perhaps signal a shift in the often traditional ways of carmakers, Mercedes-Benz will not expand its dealer network in India beyond the current sales and service touch points as it transitions to a direct gross sales model. This will see the German titan assume responsibility for distribution, warehouse, retail, and even reductions. 

The company, which leads India’s luxury market, has committed Rs. 60 crore to the new retail concept, which will see sellers work as franchisee partners, largely responsible for product demos, model expertise, automobile supply, and after-gross sales. 

“The new direct-to-customer model – under the ‘Retail of the Future’ initiative — will help drive in transparency and ease into the whole system through installation of a robust online platform,” Mercedes India MD & CEO Martin Schwenk stated. 

Mercedes will announce a nationally-set cost under the new system, as it will own the whole inventory of vehicles and charge them directly to customers. The intriguing part is that dealers will not be permitted to provide any discounts to entice customers, and will instead be treated like franchise partners. Any incentive program can be implemented immediately by the company. 

This will be the first time an automaker completes direct gross sales with sellers and retailers – now referred to as franchise partners – who will be engaged purely for inquiries, customer service, supply, and repair help, earning a fee and incentive based on the volumes they sell. 

“We are present in around 50 cities, which is sufficient to take care of existing and new customers. We have no intentions to further increase or reduce this network.” said Schwenk. 

The firm says that the measure will guarantee higher dealer profitability by eliminating possibilities of any inter-dealer cut-throat worth warfare. The sellers may even profit by saving on the stock holding price that they presently have. Such expense usually runs into crores of rupees for every retailer, and carries a curiosity price and potential penalties if shares should not liquidate (bought) on time by them. This retail program has already been carried out in countries like Austria, Sweden and South Africa, and it will be interesting to see how it plays out in India. 

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Swiggy to give 2-day paid monthly period leave to female delivery partners

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Food delivery giant Swiggy has announced a two-day paid monthly period leave policy for female delivery partners, marking an industry first. Swiggy has over 1000 women on its delivery team, and has stated that since bringing on female delivery partners, it has been working to increase inclusivity and diversity across the platform. The company believes that providing a welcoming environment for women will inspire them to explore delivering with them.  

Other initiatives to deepen inclusivity include enabling access to vehicles, access to hygienic restrooms, and implementing safety measures for female delivery partners. Mihir Shah, Vice President of Operations at Swiggy, said discomfort from being out and about on the road while menstruating is probably one of the most underreported reasons why many women don’t consider delivery to be a viable gig.  

“To support them through any menstruation-related challenges, we’ve introduced a no-questions-asked, two-day paid monthly period time-off policy for all our regular female delivery partners,” said Shah.  

SoftBank-backed Swiggy has approximately 200,000 delivery partners, with about 1,000 of them being female. Swiggy hired its first female delivery partner in Pune in 2016. “Since then, we’ve been working hard to promote inclusivity and diversity across the platform, with a goal of increasing the number of female delivery partners in Swiggy’s delivery fleet,” Shah added.

“Swiggy understands the pain of a woman in the field and period leave will definitely motivate more women to choose this platform and be independent,” said Komal, a delivery partner from Chennai.  

Last year, rival company Zomato announced a period leave policy, allowing female employees to take up to 10 period leaves in a year. These are available to employees and not the gig workforce. It has, however, taken steps to have a more inclusive gig workforce. In June this year, it said it has set a goal of reaching 10 percent female delivery partners by the end of 2021 starting with Bangalore, Hyderabad, and Pune. 

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