NOVEMBER 16, 2021

Unlimited Paid Time Off?

From our HR Consulting work, we know that many employers are beginning to consider unlimited paid vacation plans in an effort to keep employees engaged and help with retention. Unless you have a highly developed culture, the concept of unlimited Paid Time Off (PTO) may not work in your organization.  

Here are a few questions to ask yourself, to determine if you’re ready for the many unintended consequences of such a significant change.

  • Are your leaders ready to encourage the use of PTO to their teams? In our already stressed-out work environments, many people will not equate taking time off with work-life balance, but as a reason their bosses will hold them back from advancement.  
  • Do you have a high performance culture where “performance” is clearly defined and measured? If not, employees won’t know what is expected of them.
  • Do you have leadership’s, including middle-management’s, buy-in? If all layers of management aren’t on board, you may have problems.
  • Do you know how your organization and teams will ensure there is coverage during lengthy outages? 
  • Will employees who do not opt to take time off feel they are being taken advantage of by those who exercise their unlimited PTO more liberally?

It’s important to recognize that unlimited paid time off only works in companies which have a culture that is ready for this drastic shift in mindset and policy. 

Unlimited paid time off only works in a company that has a culture that is ready for this drastic shift in mindset and policy. Most organizations have an underdeveloped culture, therefore, the concept of unlimited PTO will not work in the vast majority of organizations. 

How Unlimited Paid Time Off Works

Companies that have UPTO will have different rules and stipulations on how it is used and regulated. 

Making sure workflow remains undisrupted, and preventing abuse of policies are the main things you should consider. You will likely have to take care of any future assignments early to keep a regular workflow. 

Always ask as in advance as possible, so your leadership can accommodate any changes your absence may cause.

Benefits of a UPTO Workplace 

There are several benefits of having UPTO. Employees can experience a healthy work/life balance, Get a productivity boost, and not have to worry about illness.

For a business owner, this kind of system is known to help with long term retention of employees. 

A team spirit of productivity and performance is required to keep a UPTO system working. The performance that is expected should be clearly conveyed.

Cons of a UPTO Workplace

It is possible that this time off system may not work in a variety of environments. Retail sales for example, because retail is usually 7 days a week, with high traffic on weekends and holidays. There are solutions however, such as increased blackout periods. This may be unpopular among some employees.

Employees that choose not to utilize the UPTO plan, may feel they are being taken advantage of if they have to pick up the slack for those that do utilize it. A possible solution is having tasks clearly and specifically assigned with expectations set prior to any time off. 

What if someone wants to take a really long vacation? Clearly defined rules should be in place with clear communication about what is required before an absence is authorized. If an employee steps out for a long period of time, maybe an intern or a temp might prove useful.

Responsibility

A company considering moving to this kind of system will benefit from considering the responsibilities of the standard employee, and leadership. 

Leaders need to ensure staffing requirements are met. Training should take place for employees so they understand their responsibility and agreement with the company. 

Boosted productivity and improved energy is not only expected, but needed. Everyone in the company, including leaders, will have to pull their weight for the system to work. 

This can especially bear down on leaders who may only get a restricted version of the plan, due to their several responsibilities.

Some items to consider when moving to unlimited PTO:

  • Company Culture
    • Must have a culture where leaders encourage the use of PTO
    • Must have a high performance culture where performance is clearly defined and measured. 
  • Leadership (including middle management) buy-in
  • How will the organization ensure there is coverage during lengthy outages? 
  • Will employees who do not opt to take time off feel they are being taken advantage of by those who exercise their unlimited PTO more liberally?