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The Pros and Cons of Unlimited PTO

By July 21, 2022December 16th, 2022Benefits, HR, Payroll

Paid Time Off Policy

Unlimited Paid Time Off (PTO) may sound too good to be true, but it’s one of the latest tactics that employers are using to attract new employees. With unlimited PTO, employees may take off as much time as they wish – for vacation or anything else – as long as they can get their work done and company business isn’t disrupted.

The policy can be great for recruiting. A new survey of 2,000 workers by the Harris Poll for Fortune indicates that 50% of workers in the U.S. would prefer access to unlimited PTO over earning a higher salary.

However, some companies (and employees) have found unlimited PTO to be a double-edged sword. It seems to work well for companies with a supportive culture that encourages employees to actually take time off. Yet, as one source puts it, workers often end up taking less time off than they did with a fixed policy. In some firms that offer unlimited PTO, workers take fewer vacation days because of peer pressure and perceived expectations around what constitutes ‘acceptable’ amounts of days off.

Leading by example
One worker told Fortune that her firm’s policy leaves her worrying about whether she deserves to take time off, and she’s concerned about navigating the policy as one of the team’s younger members who need to “earn her keep.”

By practicing what they preach, employers can address the reluctance to use unlimited PTO days. One executive says that she tries to model behavior and set an example that makes it easier for her team to take time off themselves, and the company’s CEO encourages employees who might feel reluctant about taking time off.

Managing staffing and projects
With an unlimited PTO policy, communication and planning become imperative. Some advice from Indeed:

  • To avoid understaffing and project hiccups, establish ground rules. Companies should explain how employees are expected to communicate with the team to inform them about their absences and ensure coverage for work duties while they’re gone.
  • Establish parameters for time-off requests. Employers may want to limit how much time can be taken at once or set a minimum number of days if employees aren’t taking enough time off.
  • Create tracking tools and calendars. Businesses told the Society for Human Resource Management that tracking helps “anticipate upcoming absences and cover all the bases in time,” as well as have fewer gaps in work coverage during the holidays.

If you need assistance crafting your PTO policies, MarathonHR is here to provide our expertise and counsel.

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