Is Unlimited PTO the Way to Go?


While the way we work has changed dramatically since the beginning of 2020, so has the way we approach PTO (paid time off). 2020 saw employees take less time off than ever before while working longer and harder than usual, resulting in a huge amount of paid time off being left on the table by employees. With the world having shut down for the better part of a year and vacation plans being completely ruined for a lot of people, it’s no wonder so many workers decided to put off, shorten, or cancel their planned vacation time.

This was furthered by the separation between work and life becoming increasingly blurred due to the sudden transition to remote work arrangements - after all, if you find yourself working from home every day, it’s natural to feel like taking time off isn’t as much of a priority. Many businesses have revisited their PTO policies in light of our new way of work - some to ensure that employees get the time away they need, especially after such a difficult year and a half, and others for financial purposes.

In recent  years, the subject of unlimited PTO in particular has sparked a great deal of debate - many companies offer unlimited paid time off to encourage high performers to choose them over a competitor. It’s considered a valuable perk. Other organizations offer “unlimited” paid time off in name only, enforcing limits on employees or discouraging employees from taking more than a certain number of days. While many businesses are still struggling with the idea of offering unlimited PTO, doing so could offer some surprising benefits for your workforce and the organization at large but there are also some pitfalls.

The benefits of PTO

Paid time off isn’t the same as vacation time - PTO is a much more all-encompassing term used to describe any paid time away from the workplace. Paid time off is an extremely valuable benefit, which most businesses can very easily offer employees.

Paid time off gives employees the opportunity to step away from the office and destress and look after personal responsibilities without worrying about work, knowing that they’ll still be taken care of. It also lessens the pressure felt by employees to work while sick, ensuring that they get healthy before returning to work, minimizing the risk of getting colleagues sick.

Unlimited PTO gives employees the freedom to take as much or as little paid time off as they need.  Offering PTO, in any form, is a great way to foster a happier, healthier workforce, while at the same time increasing employee productivity and efficiency. When employees don’t have to worry about how many days they take off for “mental health” or pure relaxation, they’re far less likely to become stressed out and unproductive. Encouraging your employees to take time away without any penalties can improve morale significantly, ultimately boosting overall performance and productivity, and increasing retention.

PTO is also a surprisingly good way to improve communication amongst your workforce, as any solid PTO policy will require coordination between teams, individual employees and management to ensure that work is covered while workers are away. This can help foster regular, healthy communication between your entire team, ensuring that everybody is kept in the loop and held accountable at all times.

Potential drawbacks of unlimited PTO

What’s most important with an unlimited PTO policy however, is encouraging employees to actually take the time off. In most cases, employees end up taking less time off when unlimited PTO policies are put into place. This often comes down to employees feeling like they don’t want to abuse the unlimited PTO arrangement and the newfound trust bestowed upon them. In a way, it can feel like the Star Wars Admiral Akbar meme: “It’s a Trap!” Taking PTO can make employees feel as if they’re doing their team a disservice by “abandoning” them, or giving themselves more work upon their return. All of this can combine into a fear of management passing them over for promotions, cool projects, or raises because they made use of the vacation policy.

With unlimited plans, not taking days off can also occur because employees will try to squeeze work time into a day where they’re also taking care of something personal. When employees take less time off than they actually require, it can be damaging in terms of morale, productivity, and overall job satisfaction. Underuse can be just as damaging as overuse, so it’s important that employees take time away when they need it. 

As such, it’s critical for management to communicate with employees that it’s okay to take a few days off here and there, and that the office will in fact continue to function until they return.  Obviously, the solution is to clearly communicate what is considered an “abuse” of unlimited PTO and to not penalize employees who do not abuse the policy. Some companies that offer unlimited PTO also recommend a certain number of days, which gives nervous employees a clear guidepost. 

Additionally, employees may not feel the pressure to take vacation if they know they can take as many days as they want; treating paid time off as a scarce commodity means if an employee knows they only have 10 days, they will take those 10 days. Structuring it more loosely may mean your team feels less pressured to take time off. 

Plus, such a policy can become an undue burden on managers - who definitely can’t take advantage of unlimited PTO if important deliverables are lined up in front of them without the staff to manage the work. 

What to do if unlimited PTO is abused

The term “unlimited” is a tricky one, and can make some employees feel that they’ll be able to take as much time off as they want, no matter what the implications to their colleagues and ongoing projects. That’s exactly why organizations put recommendations on their “unlimited” PTO policies, ensuring that employees can take time off without it becoming excessive or damaging to the organization.

Recommending limits on the amount of time that can be taken away from the office or how many employees can take PTO simultaneously is a good way to avoid these situations, especially when policy abuse has taken place. Management must communicate expectations with employees, ensuring that they can’t do things like having a whole department take the entire summer off. It’s important to continue tracking vacation time and managing time away from the office to ensure that team members not using the policy very often do not become overburdened.

Management may also be tempted to offer specialized vacation policies for workers who have been known to abuse the amount of time they took off in the past. For example, if your company offers three weeks of sick leave and three weeks of vacation, and a particular employee consistently takes six weeks each year they have worked for you, that staff member’s manager may be wary of lifting the cap. 

However, if unlimited PTO is being offered, managers have to resist this temptation. Obviously the employee has been kept on despite their use of maximum vacation time, so they must be valuable enough to the organization to ignore it if they take eight weeks instead of six. If they are not, management has their own issues in letting unproductive employees stick around for far too long. 

Lead by example and ensure that teams are set up to succeed

The best way to ensure smooth sailing when it comes to implementing and managing an unlimited PTO policy is to lead by example. It’s up to management to show employees that it’s okay to step away from work in order to recharge your batteries, tackle personal matters, or just to rest up and take care of yourself when you need it. When it comes to implementing any successful policy, management has to be able to talk the talk and walk the walk. That means management should take time off themselves when it’s required, encourage employees at risk of burnout to step away, and be more understanding when employees request a PTO day here and there.

It’s also a good idea to ensure that employees who are looking to take extended PTO set their colleagues up for success before they leave. Other team members will be the ones making up for a colleague being absent, so they should be given the resources to get everything done without burning out themselves or increasing stress. Communicate with all parties ahead of PTO to ensure that everybody is satisfied and has been handed off the resources, materials and contacts needed to handle accounts and projects, and set a timeline for how the absent employee will transition back upon their return. For last minute PTO, it’s a good idea to set expectations in the policy to ensure that work can be covered by somebody and nothing slips through the cracks.

Communicate with your team about how you’re going to approve or reject requests for time off, and be fully transparent when these things take place. If PTO must be rejected, offer a legitimate explanation to the employee and propose a better time frame. A simple explanation can go a lot further than a simple “no,” and offering PTO at a later time will at least do something to appease an employee. Ensure that the guidelines are known by all employees, and enforce them consistently - the minute you get sloppy or begin to make exceptions is when your entire policy will fall apart.

A good paid time off policy can have tremendous benefits for your business and its workforce, ensuring that everybody has the opportunity to step away when things become too stressful, when people get sick, or when life gets in the way. Unlimited PTO is a great way to increase workplace morale and job satisfaction, boost employee productivity and efficiency, enhance communication amongst teams, and make your workplace a more attractive option for new hires, when employees are encouraged to take advantage of the perk. Remember to be consistent, understanding, compassionate, and transparent when enforcing rules and setting guidelines - doing so can mean your business may be able to enjoy an unlimited PTO policy for years to come.

Managers worried about employees at risk of burnout or who may be in serious need of time off can take advantage of the contextualized productivity data offered by Prodoscore. Prodoscore makes it easier than ever before to gain visibility into how your employees are working, showing management when they’re at their most productive, when productivity falters, when performance is improving or worsening over time, which workplace apps are being used and how they’re being used, and so much more.

The contextualized data generated by Prodoscore lets you see when employees are clearly in need of time away, making it easier to get involved and offer them the help or resources they may require. With Prodoscore and a solid unlimited PTO policy in place, your business can ensure that employee burnout is a thing of the past, and that your workforce can be happier, healthier, and more productive than ever before.

To find out more about how Prodoscore can enhance your company’s PTO policy through contextualized productivity data and increased visibility, get in touch with our team today.