Pros and Cons of an Unlimited PTO Policy

Posted by Jamie Bell on Wed, Jun, 04, 2014

Any employee's ears would perk up at the idea of unlimited vacation days. This doesn't come as much of a surprise when you contrast the dream of endless time off with the idea that Americans are working more than ever, averaging more than 48 hours a week according to the Organization of Economic Cooperation and Development. summer 1100013185 1013int

The early adopters of this trendy employee perk come from the Silicon Valley startup set, but we've seen plenty of companies loosen their control on employee vacation days in recent years. Netflix, Gilt Groupe, Zynga, Castlight Health, NerdWallet, Evernote and Hubspot are just a few of the workplaces that offer their full-time employees a no-policy vacation policy. 

The driving idea behind an unlimited PTO policy is that the company trusts the employee to still get all of their work done (and, often, approval is still required to take time off). With so few American workers actually using their vacation days, offering employees an "endless summer" is a great way to encourage workers to take time off without feeling stressed or restricted. A 2013 Vacation Deprivation study by Expedia found that employees use only 10 out of every 14 vacation days each year; an unlimited PTO policy can allow workers to feel more flexible and not worry about "holding on" or rationing out their time off. 

To determine whether or not this approach would work for your office, let's look at the pros and cons: 


- It's really attractive to new hires. In terms of talent acquisition, being able to use the unlimited PTO policy as an advertised perk is a huge advantage in a crowded market. 

- It demonstrates trust. By giving your employees this "unlimited" perk, you're trusting them to use it wisely and still get their work done. 

- Employee performance and productivity can increase. Employees that use their vacation days are healthier and more relaxed. It'll allow your employees the time they need to recharge and return to work with renewed focus and drive. 

- It's one less thing for your employees to stress about. When huge, PTO-draining events come up like weddings, pregnancies or family emergencies, your employees won't have to add to the burden of those already stressful situations. 


- It can be hard to manage and implement. While smaller, startup companies can easily thrive with an unlimited PTO policy, it may be more difficult for a larger organization to track and manage "unlimited" PTO requests and ensure that not everyone is out of the office at the same time. 

- Employees could abuse the policy. Staff could be fired for improper use of unlimited PTO. (Then again, if they do abuse it, did you really want them working for you in the first place?) 

- It may not work in all settings. Industries where holidays are busy (retail or other service jobs) may not be best suited for a completely open paid time off policy. This also applies for companies that have a lot of hourly or part-time workers. 

- Loss of rewarding long-term employees. In typical workplaces, vacation days are earned based on the amount of time you've worked for the company. This policy doesn't really apply when PTO is unlimited. 

Do you think an unlimited vacation policy could work in your office? Comment below! 

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Topics: Healthy Workplaces, Wellness at Work


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