Employees value companies that offer flexible working arrangements, and unlimited paid time off (PTO) is one way to provide flexibility. Have you considered an Unlimited PTO policy? What is Unlimited PTO?
Unlimited PTO or an “unlimited vacation policy” typically means employees can take as many days off as needed throughout the year, providing their productivity doesn’t suffer and the business needs are still met. Below are a few pros and cons to consider before deciding to implement within a company. The Pros:
- Cost Savings. When employees cash in their unused leave days at the end of the year or when they resign, companies may have to pay large sums of money depending on their policy. By eliminating accrued hours, the organization is absolved of this responsibility.
- Boost Morale. Unlimited PTO promotes a trusting culture and positive workplace environment by empowering employees to take time off as needed. It also shows that the organization values employees outside of work and cares about their mental and physical health.
- Great Recruitment Tool. Today, many job seekers prioritize the flexibility to balance work and personal life. And while unlimited vacation is gaining popularity, many organizations still haven’t implemented it. Therefore, those with this competitive edge show they value and trust their employees.
- Employee Retention. By offering more flexibility through Unlimited PTO, current employees will avoid burnout, a significant factor that causes employees to look for work elsewhere to achieve a better work-life balance. Higher employee retention also eliminates the high cost of employee turnover and new staff training.
- No End-of-Year PTO Rush. By removing the “use it or lose it” mentality, understaffed offices, and lost productivity are also eliminated since employees are not trying to use the extra PTO days they have accrued.
The Cons:
- Employees May Abuse the Policy. While most employees will responsibly use Unlimited PTO, some will abuse the policy without fear of losing their jobs. This can impact deadlines, affect the workload of others and lead to disharmony.
- Managers May Not Embrace it. Unlimited PTO puts everyone on an equal field, meaning an employee who started last week has just as much time off as a manager who’s been in the organization for twenty years. This may lead to frustration and disengagement among your senior staff.
- PTO is No Longer a Reward. Implementing an Unlimited PTO policy for everyone will remove the opportunity to award “extra” vacation as a reward or incentive. Organizations may need to find other ways to motivate and reward employees.
- Tension in the Workplace. There can be a negative impact on office culture if an employee takes more time off than others; it can create tension and friction in the workplace. Employees may become frustrated if work is not completed and the individuals they need are unavailable.
- Unclear expectations. Without clear communication of performance expectations, employees are left to interpret expectations, which can cause conflict on multiple fronts.
Outfitting your organization with an Unlimited PTO policy may or may not be suitable. Weigh the pros and cons before aligning to this kind of plan, even if it means your competitors offer something to job seekers that you don’t. There may be other benefits that can set your brand apart that align with your company’s needs. What’s important is that you’re supporting the ultimate success of the company’s employees. If you have questions about Unlimited PTO or other innovative incentives to attract the best candidates, Reynolds + Rowella is here to help. Contact Katie Hall for best practices in attracting and retaining top talent.
Katie Hall, PHR, Director, HR katieh@reynoldsrowella.com Known for her ability to offer sound advice on a wide range of Human Resources topics, Katie is skilled at developing practical Human Resources processes and procedures relevant to growing businesses. Katie has extensive hands-on experience leading HR initiatives, including policy design, compensation, performance management, recruiting, compliance reporting, HR workflow development, training and development, and benefits administration. She assists R+R clients with recruiting and retaining quality staff and working closely with individuals regarding their benefits and training.
Reynolds + Rowella is a regional accounting and consulting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve. Our mission is to operate as a financial services firm of outstanding quality. Our efforts are directed at serving our clients in the most efficient and responsive manner possible, delivering services that exceed the expectations of those we serve. The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, please contact Elizabeth Bresnan at 203.438.0161 or email.
