Many progressive employers are merging all types of PTO into unlimited time off, rather than dividing personal time into personal, sick, and vacation days. Thanks to advancements in technology, the lines are blurred between professional and personal time—allowing many people to work remotely even when they are not feeling well enough to head into the office, or to pack their laptops along with their flip-flops when it comes time for that summer vacation.
In this post, we look at the PTO landscape and weigh out the pros and cons of providing unlimited PTO.
More than half of the workers in the United States report they work from time to time while out of the office, with a majority of those either feeling pressure to work or uncertain of company expectations regarding being productive during PTO. Many believe there is an unwritten rule that mandates tasks such as monitoring and answering emails as well as taking conference calls should be handled when away from the office. Plus, those who work for smaller employers may not have anyone to perform their duties in their absence.
It is important to remind employees that PTO is a benefit, and downtime can refresh and recharge employees—making them more highly motivated and productive in the long run. That said, there are employees who will feel less anxiety about returning to the office if their inbox—and voicemail—isn’t full. Presenting clear vacation policies can be a challenge for management and HR. An employer may want to have an HRA company weigh in. Many may wonder if employees would take advantage of unlimited PTO. Or, would some unexpected benefits surface? Here are some pros and cons to unlimited PTO.
Let’s Take a Look at the Pros.
• Higher employee satisfaction. Trusting in employees to take the appropriate amount of time off for illness, vacation, and bereavement makes your company more attractive to young, fresh talent. It also empowers them and allows them to connect with their employers on an entirely new level, which can also serve as a morale boost. This can be a major perk that gives you a competitive edge—setting yourself apart from others in your industry. And, studies show that a majority of employees take approximately the same amount of time off as they would with an accrued system of PTO.
• Reduced costs/administrative efficiency. Employers can reap numerous benefits from this policy as well. Less time will be spent managing PTO, plus they will not have to pay employees for any accrued or unused PTO once they leave the company. Plus, companies can avoid understaffing at year’s end when employees are scrambling to take PTO before they lose it.
• Administrative efficiency. HR will have one less metric to track for employees when they do not have to keep track of employees’ time out of the office.
Let’s Weigh out the Cons.
• Undefined expectations. Accrued PTO is the standard for most employers and works well. If a policy works, many companies prefer to stick with it rather than venturing into unfamiliar territory. Without a clear plan, employees may not know how much time they could/should take—which could result in them not taking any time off at all—causing stress.
• PTO may overlap. It may become an issue for employers to cover an employee who decides to take a month off—especially if an employee with similar responsibilities decides to put in for PTO around the same time. Health reimbursement account administration may have to get involved to resolve the situation. It is impossible for some companies to have positions vacated for unpredictable—and unlimited—amounts of time. Productivity then becomes an issue.
• Lack of leadership modeling. Employees often model managers when it comes to taking vacation time. If they see that their managers are not taking PTO, they may not feel like they should either.
Still unsure about which policy to adopt? Unlimited PTO is not right for every workplace. If your workplace exhibits a great deal of trust and transparency, and HR takes the proper steps to establish expectations and provide support, it may be a viable option for your business.
