Is Unlimited PTO a Good Fit for Your Organization?

Recently, unlimited paid time off (PTO) has become more popular around the country. It allows workers to take time off whenever they need to, whether to enjoy a vacation or to deal with an illness. As long as their workload doesn’t suffer, they’re free to take all the time off they need.

Unlimited PTO is, unsurprisingly, one of the benefits that is always at the top of the list when potential employees consider a job. Leave policies can have a substantial impact on existing workers, too, as well as on the business as a whole, for better or worse.?

The Family and Medical Leave Act dictates that all employees must receive 12 weeks of unpaid vacation each year, but there are no laws regarding paid time off. With that in mind, let’s discuss whether offering unlimited PTO is the right option for your organization.

Benefits of Offering Unlimited PTO

There is no doubt that unlimited PTO can provide a slew of benefits for a business or organization. The trick, however, is knowing whether these positives outweigh the negatives:

Improving Retention

Employee retention is a priority for many businesses, and the happier employees are, the more likely it is that they’ll stay. Offering unlimited PTO shows your employees that you trust them and are invested in ensuring their happiness. Workers who feel valued will experience less burnout and be less ready to jump ship.?

Simple to Implement

Unlimited PTO doesn’t require that you keep track of everyone’s time off. You can send a memo alerting your workers of the change and you’re done. It’s an effective means of decreasing administrative tasks.?

Improved Productivity

Because employees won’t have to hoard vacation days, they don’t have to work if they’re sick. That, on its own, can lead to increased productivity. But in general, workers who feel well-rested tend to work harder and more efficiently. Your workers can take the time off they need and come back ready to offer their best.?

Drawbacks of Offering Unlimited PTO

As impressive as the benefits can be, there are also drawbacks to be aware of. These include the following:

Potential for PTO Abuse

All it takes is one employee to abuse the unlimited PTO to make the rest of the team suffer. They may hand off tasks to others, thus increasing their workloads, or start missing deadlines. That affects everyone and can even lead other workers to experience burnout.?

Inability to Use PTO as an Incentive

Many organizations offer PTO as a means of rewarding hard work. With unlimited PTO on the table, your employees will no longer have the incentive to meet performance goals so that they can earn their time off. That means you’ll need to brainstorm other incentives you can offer, which may not be something you want to do.?

Scheduling Conflicts

If your employees can take time off whenever they want and they don’t have to run it by anyone, all manner of scheduling conflicts can arise. You may end up with half your workforce out on a particular day, leaving you understaffed.?

Blurred Work-Life Boundaries

Unlimited PTO can have the opposite effect you want and can actually end up stressing your workers more. They may feel that they need to be on-call when they take time off because it’s not technically “vacation time.” That can quickly result in burnout which drops productivity and could result in employees choosing to leave altogether.

Employees May Not Use It

Employees may not be fully aware of what the unlimited PTO policy entails and could, therefore, be wary of taking advantage of it. They may not have a good idea of what constitutes an acceptable amount of leave, leading them not to take any time off. That can result in being overworked.?

Bring Balance and Clarity to Your Organization With AssetHR

Managing your workers effectively while ensuring that they’re happy is a tough balancing act. But at AssetHR, our human resources consulting experts will take a look at your existing time off policies and help you find the right solutions for your unique business. No matter what your goals are, we can help you achieve them. Contact our team at AssetHR to schedule a consultation.