Does Unlimited PTO Work?

Published: Jul 02, 2018

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With work/life balance rising as a top workpace value, one of the best ways employers can increase productivity is by creating a happier and stress-free workforce. One way to achieve this is to allow employees to have time away from the office. Recently, InfoTrust, Netflix, Krono’s, and many other firms have added unlimited paid time off to their list of employee benefits. Despite obvious concerns with allowing employees the freedom to take as much vacation as they want, employers that have tested out this vacation policy have seen little change in their employees’ vacation habits—the average time employees take off at companies with unlimited PTO compared to those without the policy is virtually equal.

Crisp Video Group, for example, discovered that most employees are still averaging two to three weeks of paid time off, including sick days, under its unlimited PTO plan. And the largest number of weeks taken noted by other employees at other companies with unlimited PTO was about five. Most companies upholding this policy are tracking the amount of time taken off, but others aren’t. It’s also important to keep in mind that unlimited PTO is still scheduled PTO.

So, what are the potential negatives with this type of policy? For those companies that have tried it, the complaints have been miniscule, but they have received some. The most common complaint is from employees who have saved up their PTO to accrue cash rather than utilizing the vacation days. Another common worry within this vacation program is that some employers that have implemented it haven’t made the rules of how it functions clear. Employees in these instances weren’t sure what was expected of them and therefore didn’t use much PTO. They were not provided proper instruction on how much PTO would be acceptable to use, how much would be frowned upon on managers, or how to request days off appropriately.

Kickstarter employees found themselves so confused by the policy that the company removed it and replaced it with a formal PTO plan. During a trial run of unlimited vacation time at Krono’s, its HR team dealt with complaints from more tenured employees who were upset that, when the unlimited vacation policy came into effect, new hires were given the same benefits immediately that they had been with the company years to receive.

Despite these concerns, in an article by Nathan Christensen, CEO at Mammoth, he notes that, in general, employees value this benefit. At Mammoth, employees value their flexible vacation policy as highly their health insurance and 401(k), since unlimited PTO offers a stress-free environment for employees to schedule in necessary personal time with their work schedules. Not having to sacrifice vacation time for important life events (such as caring for a sick family member or standing up in a friend’s wedding) is mentally freeing. After Krono’s implemented the policy, it found that those who benefitted most from the flexibility of unlimited vacation hours were employees in their 30s and 40s and those with children.

Employees with unlimited vacation have even been using their time to give back to their communities by volunteering—which not only positively impacts communities but also creates a positive perception of employees and employers.

In a recent Q&A, Michael Mogill, president and CEO of Crisp Video Group, notes that each of his employees has a different definition of what work/life balance is, adding that there’s a big difference among employees’ PTO needs. And so, if more firms follow these other firms' lead, providing a more individualized PTO benefit structure to employees, it might just create a much healthier labor force overall.

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