Each generation increasingly prioritizes work-life balance, and as a result, unlimited Paid Time Off (PTO) is becoming a popular component of an employer’s total rewards package. This article from HR Morning delves into the pros, cons, and other aspects of this trending benefit. How Does Unlimited PTO Work? Unlimited PTO doesn’t allow employees to take time off whenever they want without following an established process. Employees must submit a request in advance and obtain manager approval, and there are boundaries in place. Pros of Unlimited PTO Unlimited PTO offers several advantages. First, it attracts and retains talent, making it a significant draw for potential employees looking for flexibility. Second, it boosts employee morale and trust. Last, it saves HR time and effort by eliminating the need to track leave. Cons of Unlimited PTO There are also some drawbacks to consider. There is a risk of policy abuse, where employees may take off more time than is reasonable. Additionally, unlimited time off can cause tension between colleagues if one employee takes significantly more leave than others. There are also potential legal concerns, as unlimited PTO can conflict with other types of leave. How Do You Determine if Unlimited PTO Will Work for Your Business? Unlimited PTO isn’t going to suit every company. Evaluate the type of business, the needs of your employees, and your company’s culture when considering what type of PTO will be the best fit for your company. What are some Best Practices for Implementing Unlimited PTO? To successfully implement an unlimited PTO policy, there are several best practices to follow. First, clearly define what is and isn’t allowed within the policy and update the employee handbook. Second, offer training to employees that addresses common questions. Last, employ a master calendar to ensure teams stay organized and coordinate leave. Regardless of the type of PTO plan, it’s crucial for employers to nurture a culture that values time away from work. Creating a work culture that supports mental and physical health is essential. When deciding what kind of PTO your company should offer, remember that it is a benefit that extends far beyond attracting talent. #UnlimitedPTO #WorkLifeBalance #EmployeeBenefits #TalentRetention #WorkplaceCulture #EmployeeEngagement #PTOPolicy #WorkplaceWellness #TotalRewards #OSUTotalRewards This LinkedIn activity is a component of my Total Rewards course for The Ohio State University Fisher College of Business. I'm eager to connect with others interested in compensation, benefits, development, recognition, and well-being.
HR’s Guide to Unlimited PTO: Pro, Cons and 3 Best Practices
hrmorning.com
Hi Carie, this is a great topic and is getting quite a bit of traction right now. While I am pro-unlimited PTO myself, I agree that the drawbacks you shared could pose issues in the workplace. I wanted to mention that many studies (including from SHRM) have also shown that employees who work at a company that offers unlimited PTO tend to take less time off than those who work at companies that have stricter PTO allotments. I found this fascinating, as it sheds light on how pressure from unwritten rules, social stigma, and possibly poor managers can create a more hostile work environment that may lead to significant burnout. There is a fine line to balance, and HR needs to ensure that unlimited PTO is implemented effectively for everyone involved.
Carie, this is one of my favorite topics so I thought I’d chime in! One approach to unlimited PTO I’ve seen that interests me is requiring employees to take a minimum amount of PTO annually. I think the idea is it could combat some of the challenges mentioned here like the stat about people actually taking less time off under these plans. I’ve never experienced a PTO policy like that myself but I know they’re out there and I’ve always been curious how the minimum requirement affects the experience for the employees and the company.
Alexis Hirsch
1mo
Great post, Carie! Unlimited PTO can definitely be a strong selling point for attracting talent and supporting work-life balance, but it’s important to implement it thoughtfully. As you mentioned, clear guidelines and communication are key to avoiding abuse and maintaining fairness among teams. Aligning the policy with company culture and values ensures it’s a true benefit for both employees and the organization. Ultimately, fostering a culture that values time off is just as important as the PTO policy itself.
Brandi Bannerman
1mo
This is such a thought-provoking conversation. Thank you for sharing, Carie! After COVID, a lot of people started prioritizing work-life balance when searching for a new career opportunity. It has become more and more popular, but as you mentioned, it does come with some challenges. I appreciate you highlighting how important it is to create a work culture that supports both mental and physical health. While some companies may not offer unlimited PTO, I believe many still manage to create a positive culture!
Such an interesting topic! As Abby mentions, I too have read many articles stating that team members actually take less PTO using the unlimited PTO model as compared to the traditional PTO plans. A long tenured family member of mine previously had 6 weeks of vacation and now that her company has shifted to this model she is either discouraged from taking or is unable to take the same amount of time that she would have been granted. If a company were to implement unlimited PTO, managers should be provided with guidelines or training on how to accept or deny PTO requests to avoid favoritism and other legal risks. Additionally, I think employers need to analyze other forms of flexibility when determining their approach such as work from home capabilities and leave options offered to team members.
Olivia Tolkinen
1mo
This is a great breakdown of unlimited PTO and its potential impacts on workplace culture. It's true that while unlimited PTO can be attractive for its flexibility, it requires thoughtful implementation to prevent misunderstandings and ensure fairness across teams. This approach shows that PTO policies should be more than just an attraction tool, but also a reflection of a company’s commitment to employee well-being and work-life balance. Thanks for sharing these insights Carrie! 4o
Erin Stitt
1mo
Something that I’ve witnessed with Marc basically having unlimited PTO is that there’s so much work to be done that taking time off isn’t always possible or realistic. He never takes all of the time he could each year. I think once you get to a certain level in senior management, you’re less likely to be able to take the time you actually need!
So where does your perspective sit on this spectrum?