Many Human Resources leaders are talking about the pros and cons of unlimited paid time off, more commonly known as unlimited PTO. Some proponents of this benefit stress how it can help employees relieve stress, gain trust, and feel autonomous. Critics of the benefit point to studies that show people are less likely to take unlimited PTO for fear of looking like they are abusing it. In addition, some of them argue that it favors employers because they no longer have to pay out unused days off when someone leaves the company.
HR Exchange Network turned to the HR and business leaders on Featured, formerly Terkel.io, to ask about the pros and cons of unlimited PTO. Here's what they shared:
Unlimited PTO Contributes to Wellness Efforts
"Unlimited PTO offer a lot of benefits, like better support for employees' mental health. Most employees use PTOs to avoid or deal with burnout and focus on their mental health to avoid anxiety and depression.
In the United States, almost half of adults will experience a mental illness during their lifetime (Kapil, 2019). Hence, PTOs are very important and very much needed. Unlimited PTOs also prioritize the health of employees.
Since they no longer have to worry that they'll use up all their PTOs when sick, they are no longer forced to work, even when sick. However, offering unlimited PTOs may achieve the opposite.
Aside from the possibility that it might get abused, some employees might become more afraid to use their PTOs because they are afraid that they may be tagged as abusing the benefit. Though there are drawbacks to offering unlimited PTOs, we still believe that the benefits far outweigh the disadvantages."-Steven Mostyn, Chief Human Resources Officer, Management.org
Unlimited PTO Attracts Recruits
"Unlimited PTO can promote a culture of trust and empower employees to take ownership of their work-life balance. It can also be an attractive perk for potential recruits.
Some employees might feel uncertain about how much time off is truly acceptable, leading to fewer vacation days taken or uneven usage across teams.
It's essential to know your workforce and consider their specific needs and the nature of their work before deciding on such a policy."-Vincent Zhu, CEO and Founder, ShineACS Locks
Unlimited PTO Boosts Morale
"As an HR leader, I've seen both benefits and drawbacks of unlimited PTO. When implemented correctly, it can foster employee autonomy and boost morale. However, it also requires a high level of trust and responsibility from employees.
Without clear guidelines, it could lead to under-utilization if employees fear taking too much time off, or overuse, which can strain resources. Therefore, whether to offer unlimited PTO should be based on careful consideration of your company's culture, structure, and resources."-Farhan Advani, Director of Marketing, PhotoshopBuzz
Unlimited PTO Is a Demonstration of Trust
"I believe unlimited PTO can be beneficial if managed correctly. It shows trust in employees' ability to manage their time and workload, enhancing job satisfaction.
However, it might also create unintended pressure, as employees could feel they should always be available or underutilize their time off out of concern for how they are perceived. So, clear communication and proper management are essential when implementing this policy."-Ranee Zhang, VP of Growth, Airgram
READ: What Microsoft's New Unlimited PTO Policy Really Means
Employees May Take Less Time Off
"Unlimited PTO, while an idea that seems great in theory, has had mixed results and is best approached with care. Studies have shown that employees take less time off on an unlimited PTO plan than on a traditional, fixed PTO plan, particularly in work environments where they feel guilty for not putting in lots of hours.
Before jumping to unlimited PTO, consider expanding the amount you're currently offering employees (say, from two weeks to three or four weeks) across the board, regardless of seniority or job title. If you decide to offer unlimited PTO, build accountability measures to ensure people are tracking and taking time off for themselves at regular intervals.
Encourage senior leaders and managers to model using their PTO. Finally, consider whether your internal company culture rewards people for taking time to recharge or whether there are internal pressures causing employees to stay at their desks."-Genevieve McGahey, Senior DEIB Consultant, Peoplism
Unlimited PTO Is Not for Everyone
"Implementing unlimited Paid Time Off (PTO) can be a beneficial move, providing employees with greater flexibility and promoting a culture of trust. This can cause increased job satisfaction, productivity, and loyalty.
However, the concept isn't without its challenges. Without clear guidelines, it can lead to confusion over acceptable time off, or potential misuse. Therefore, while implementing such a policy, a balance must be struck between providing freedom and ensuring business continuity.
Unlimited PTO isn't a universal solution; its adoption should depend on specific business needs and company culture, with clear communication to ease potential misinterpretations."-Vikrant Shaurya, CEO, Authors On Mission
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