Unlimited PTO vs. Limited PTO
Asking for a friend, “Why do I have to earn my paid time off?”
The answer is simple, “You shouldn’t have to — PTO should be unlimited.”
Unlimited paid time off has always been the obvious choice for employees, but all too often it is disguised as unnecessary and unwanted by employers.
Consider that the people usually framing constrained paid time off as a great benefit are also the people that do not answer to anyone about how much time they take off.
Now, if you are wondering why companies do or do not limit their PTO offerings, it is a complicated subject with many considerations including;
- Costs — the cost of unlimited PTO can be very high for a company but one could argue the cost of turnover from burnt out employees is far more
- Employment laws — countries have vastly different approaches to paid time off and local governments often have their own restrictions and the rise of remote work has put companies into new situations
- Flexibility — limited PTO policies are inherently inflexible which can be difficult for employees, who are people after all, and may need more time off than is prescribed in an employee handbook
Unlimited PTO will continue to become more popular and it’s no secret as to why. Companies will realize that by trusting employees with their own vacation schedules, they will reduce stress and invigorate teams.
Retention rates and productivity will rise, the business will become more efficient, and revenue will increase.
Trust your employees
Employees are responsible and trusting them to moderate their own paid time off is beneficial for both employers and employees. Employees will be more likely to stay with the company longer and be more productive, as they will not feel constrained by limited PTO policies. Employers will save money as they won’t have to pay out unused PTO when an employee leaves.
Reduce Stress
Nobody needs more stress these days; it is an unfortunate reality that work can often be a source of worry and anxiety. With limited PTO, the thought of taking a sick day or vacation can seem like a daunting task, as you may worry about accrued days off and whether that will conflict with a planned vacation. With unlimited PTO, you have the freedom to take time off when you need it the most, without having to be concerned about your days off balance or if it will interfere with other plans.
Invigorate your team
Remote work has often left employees working longer hours with concerns around burnout and decreased productivity. Allowing employees to take the time off they need is essential for teams to accomplish big goals. People that are able to take the time off they need to recharge will be happier, less stressed, and better equipped to do their jobs. This will lead to better morale, improved team collaboration, and more creative problem-solving.
Overall, an unlimited PTO is a great policy for both employers and employees, and clearly the best policy for companies to adopt.
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Experienced HR Leader | Driving Organizational Growth through Innovative HR Strategies | Champion of Inclusivity and Employee Engagement
1 年I love this take on PTO. Though I have not worked with this kind of leave policy, I have often wanted to implement a mandatory leave policy. Employees who love what they do and dedicated to a company’s mission tend to forget to take time to rest and reset. I think there are some employers who are afraid that people may take advantage of unlimited PTO.
Sr. Director of Human Resources ? Master of Human Resources ? Team Building | Operational Efficiency | Employee Engagement | Talent Acquisition | Employment Law
1 年This, like many other things, depends on the cultural health of the organization. In an organization that truly values it's employees and builds healthy teams that care about each other, this would be a great benefit. In an organization that does not have those traits, it may not be such a good thing. What works in one company and fails in another is usually determined by organizational culture.
Software Engineering Leadership | Generally Helpful Guy | 2x Googler, exTwitter, Amazon
2 年Actually, I think unlimited PTO is worse for employees, in aggregate. It tends to create inequities. Some people are more inclined to take it than others, and some teams are better positioned for their members to get time away. It's difficult to manage these inequities no matter how hard you try. Additionally, unlimited PTO means that unused PTO doesn't get paid out when you leave a company, which I find a bit unfair. I think when it works it's great, but in practice isn't as effective as it sounds.
Strategist & Advisor - Cybersecurity and Privacy
2 年Have you seen any studies comparing the vacation time taken under (Limited) PTO vs Unlimited PTO? My sense is that employees take *less* vacation under Unlimited, and they aren't accruing the cash value of the untaken days. In other words, it's cheaper for the company to operate under Unlimited PTO.
Founder & CEO @ BIG, Inc | Fractional CPO, Product, Strategy, Execution Consultant | Leading Great Teams, Building Extraordinary Products & Delivering Exceptional Outcomes
2 年Interesting... and in principle I agree HOWEVER... in this season of layoffs, people quickly find out that they don't get paid out on accrued vacation time under unlimited PTO programs. So while you would normally be accruing a cash value with every pay period or hours worked under a fixed accrual program, with unlimited PTO programs there is nothing to accrue. That probably doesn't matter to people who stay at the same company for decades at a stretch... well, at least not until they leave or get laid off OR actually try to take more than 2 weeks off OR take off every Friday through the end of the year to burn off that "use it or lose it" PTO. So while it may seem like a much larger liability for the company to offer unlimited PTO, the reality enforced by the cultural norms of Corporate America makes it actually LESS of a cash liability. It's like getting lunch, snacks and good coffee provided at work, it seems like a benefit but is designed to keep you in the building and at your desk. I once interviewed at a company that had a private chef, commercial kitchen and wait staff that brought your lunch to your desk. They bragged that it was a pretty nice perk, and then they told me about the mandatory 10 hour workdays. ??