Is unlimited PTO right for you?
When employees hear about unlimited paid time off, it may sound too good to be true. Why would companies pay them to take unlimited time off? In truth, “unlimited PTO” has advantages for employees and employers, but it’s not right for everyone. Newer companies and startups developing vacation policies need to consider the financial and administrative overhead of whatever policy they choose, as well as what will best serve customers and employees.
What is unlimited PTO?
“No policy” time off, also known as unlimited PTO, covers absences from work including vacation, personal days, and brief illness. It allows employees to take time off without tracking time off balances, or being limited to a particular amount of time off.
Employees benefit from the freedom to make vacation arrangements or take off in the middle of the day for medical appointments, children’s school events, or other personal events without needing to account for every minute of their time. Employers benefit from not having to implement a time off tracking system, or closely monitor whether employees are following time off rules. It also allows for some cost savings and better ability to forecast costs when an employee moves on; unlimited PTO policies typically mean that there is no accrual of time off, so there are no payouts for unused time off.
When is unlimited PTO a good idea?
Unlimited PTO works great for some kinds of jobs and workers, but if you’re a call center worker or support engineer? Not so much. Flexibility works well in jobs that can be done off-hours or from home, but not for roles where unplanned absence hurts customers – just imagine if your Starbucks barista had unlimited time off.
Unlimited PTO works if your business allows for autonomy and flexibility. For salaried workers who are exempt from overtime pay, unlimited PTO can be a great option. For instance, a recruiting leader can take unlimited time off as long as she meets performance goals and has someone to cover for her when she’s out.
How does it really work?
Unlimited PTO will work best when expectations are clear.
Employees should:
- Keep managers informed of their plans, especially if considering an extended break.
- Make sure they’ve got coverage or back up.
- Be accountable for the impact of absences on their performance goals and their team.
Employers should:
- Encourage employees to enjoy and make the most of their PTO.
- Approve time off whenever reasonable, and work with employees on alternate plans if they can’t approve a time off request for any reason.
- Have a policy to cover extended absences, maternity/paternity, and medical leaves.
The time off approach that’s right for your company is one that will keep your employees feeling valued and supported. If your company’s work lends itself to flexibility, unlimited PTO might be for you.
Need help thinking through time off, flex time and work from home policies? Contact us at info@reverbpeople.com
