Your employees might love their jobs, but here’s the truth: They still want (and deserve) some time off the clock.
That’s why your paid time off (PTO) policy carries so much weight, with 76% of employees saying it’s “very important” for their employers to provide paid vacation time.
Fortunately, the option to escape our desks without sacrificing a paycheck has become more and more the norm, with the U.S. Bureau of Labor Statistics reporting that the majority of employers offer at least some PTO.
While something is better than nothing, formal PTO policies can still feel a bit restrictive. It’s up to employees to dock themselves those two hours they spent at the dentist. They need to subtract the half day they used to chaperone their kid’s field trip. They need to keep a close eye on how much they’re taking from their total so that they don’t go over their allotment for the year.
All of that record keeping can add extra stress, time, and headaches for employees and their managers, which has led several companies—from Netflix to LinkedIn—to make the switch to offering unlimited time off.
It’s exactly what it sounds like: There aren’t explicit rules, policies, or expectations about when workers can sign off and step away (whether that’s for an appointment or a true vacation). They take the time when they need it.
It sounds dreamy for employees—and maybe a little scary for employers. But, is unlimited PTO really all it’s cracked up to be? Well, the answer is a little complicated.
Offering Unlimited Time Off: The Pros
Let’s start with the good news first. Offering unlimited time off offers a number of perks for employees and the company as a whole.
1. There’s More Flexibility For Employees
When you step back and really think about it, the “standard” PTO system as we know it sounds a bit ridiculous. Grown adults are expected to ask fellow grown adults for explicit permission to go to the doctor or take a long weekend—and, even worse, there’s the potential that they could be turned down.
It’s essentially the grown-up equivalent of raising your hand and asking if you can use the bathroom. And it’s also why flexibility and autonomy are some of the biggest benefits of unlimited time off. This open-ended policy gives employees greater control over their own needs and schedules.
When the focus on flexibility is continuing to increase among workers (54% of employees around the world say they’ll quit their job if they aren’t given some form of flexibility post-pandemic), unlimited PTO gives your team the level of freedom and independence they’re undeniably craving.
2. You Foster A More Positive Culture
You can’t give employees control over their own time and work schedules without a high degree of trust. Workers will quickly notice if their companies say they have access to unlimited PTO but then proceed to micromanage their hours and commitments.
The perk of being able to take the time they need when they need it is a big one for employees. But, the necessary trust that plays into that benefit is arguably even more important.
As an article for Harvard Business Review reports, “Employees in high-trust organizations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working at low-trust companies.”
To sum it up? It’s not just the fact that employees can take a four-day weekend whenever they want that contributes to a thriving company culture–it’s the fact that you have confidence in them to make those decisions for themselves.
3. You’ll Have An Easier Time With Recruitment And Retention
As the working world slowly returns to normal from the abrupt changes of the COVID-19 pandemic, this much is true: Time off is going to start carrying more and more weight with workers.
When 92% of employees say they canceled, postponed, or didn’t book a vacation in 2020 due to the pandemic, it’s likely that they’re itching to finally step back, rest, and recharge—and they’re looking for employers to support them in doing so.
Companies who respond to that by making mindful changes to their PTO policies and benefits will have an easier time keeping their best talent around, while also separating themselves from the competition to attract high-quality candidates to their open positions.
Offering Unlimited Time Off: The Cons
Putting employees in a position of control over their own time off has its benefits. But, what’s the catch here? As with anything, there are a couple of potential downsides.
1. There’s Potential For Guilt And Uncertainty
As a manager, your first concern is probably something like this: “Unlimited time off?! Doesn’t this mean that employees will take months of vacation? Won’t they abuse the policy and never actually get their work done?”
It seems counterintuitive, but the opposite usually proves to be true. Without structure or more rigid expectations in place, workers actually take less time off.
One study conducted by Namely found that employees who had an unlimited PTO plan took an average of 13 days off per year. Oddly enough, that’s two days less than the number of vacation days (15) taken by employees under a traditional PTO plan.
Huh? What’s going on here? Why aren’t employees racking up getaways and self-care days if they have the option to? Well, there’s potentially a lot at play. But, the biggest is that unlimited PTO can leave employees feeling murky on how much vacation is actually reasonable for them.
They’re now taking their cues from cultural norms rather than a formal policy. So, they see what others are doing, err on the side of caution to take less time than they need, and the whole cycle perpetuates itself through your team and entire company.
2. You Might Have A Tough Time Scheduling
The very concept behind unlimited vacation means your employees can take time off when they want it, but that’s not feasible on every team or in every role.
For example, think about functions where you constantly need someone on and available—such as customer service or your IT help desk. You need some level of oversight into who’s working and when to make sure you have the appropriate coverage.
But, what if every single team member plans to take the Wednesday before Thanksgiving off? Or, what if by some odd circumstance, half of the team wants to take vacation the exact same week in July?
How will you decide who actually gets that time and who doesn’t so that your department can keep running? How will you keep things equal? Is vacation time truly unlimited if you’re still having to make hard calls about whether or not people can take it?
The flexibility and loose structure of unlimited PTO can mean great things for your employees—but it can undoubtedly complicate scheduling and workload management for leaders.
Is Unlimited Time Off Right For Your Team?
Here’s the best answer we can give you: It depends.
Some companies have had great success with offering unlimited PTO while others have backtracked those policies after realizing it actually wasn’t the right fit for them.
If you still feel unsure whether you should stick with a more formalized approach or keep things open-ended for your employees, the best thing you can do is talk to your team. Ask them questions like:
- How do you feel about our current PTO policy?
- Are there any changes you’d like to see made to our PTO policy?
- Do you have any feelings about unlimited PTO?
- Do you feel that your manager and your team encourage you to take adequate time off?
Ultimately, what works best for one company might not be the default right choice for you. But, your employees are a great resource to understand which route you should go. After all, the right PTO policy is one that’s focused on your team and their needs.