Unlimited PTO: Why the Hate? Let’s Debate!

Unlimited paid time off?! Sounds like a dream. So what’s to debate? Apparently a lot, according to conversations on Reddit and LinkedIn.

To discuss the pros and cons of this controversial topic, we invited Nikki Spencer, Director of Business Development at The Starr Conspiracy, and Christine Kensey, Phenom’s Senior Director of Global Organizational Effectiveness to last week’s episode of Talent Experience Live.

Read on for the highlights, or watch the full episode below!

A Love | Hate Relationship?

For a better idea on how our own community feels about this polarizing topic, we conducted a quick LinkedIn poll before the episode. With over 200 responses, here’s what we found:

• 69% love it
• 8% hate it
• 14% prefer required PTO
• 9% think it’s complicated
  

The response was loud and clear. The majority see unlimited PTO as a positive policy that fosters a better work-life balance, empowers employees to manage their own time, and eliminates the stress of accruing days based on the number of years served. So what are 8% of "haters" reacting to?

• Employees don’t feel they have “permission” to actually take time off. Studies show that employees with unlimited PTO take less time away from work for fear of not being viewed as hard workers.
  
• Calling it “unlimited” is misleading. If we want to get technical, the term itself is a lie (12-month vacation, anyone?). A more accurate name like “Take It When You Need It PTO” could set more realistic expectations and set the tone for a culture of responsible trust.
  
• It benefits the employer, too. Companies normally don't offer a pay out for unused time when an employee resigns. This rubs some people the wrong way...a few going as far as to say "it's one of the greatest scams ever pulled off by employers."
  

Moving Past A “Use It or Lose It” Mentality

At her former job, where Spencer was an hourly employee with a traditional policy that alloted only two weeks of vacation a year, she operated with a “scarcity mentality”. What does that mean? Every January 1st, she felt pressured to decide how she would allocate her limited time off for the entire year — whether to take it for mental health, care for family, or save it for vacations.

Coming from a world where how much you work or how hard you work is equal to your value as an employee, is a stark contrast to the culture at The Starr Conspiracy. The “abundance mentality” of her current employer’s unlimited PTO policy gives her the freedom to use her time when and how she needs it — and seeing coworkers use the policy gives her permission to feel ok about it.

Employees’ dedication and passion for their work (and respect for one another), are key to making this policy work. As Spencer stated, “it’s common sense not to leave team members in a tough position [when taking PTO].” To note: Spencer still only takes 2 or 3 weeks off per year, she revealed.

How to Position an Unlimited PTO Policy for Success

If your organization currently offers or plans to offer “unlimited” PTO, there are some key ways to ensure employees get the most out of it. Kensey shared some advice that addresses four central themes: expectations, communication, empowerment, and challenges.

1. Set expectations that it’s not “one-size-fits-all.” As Kensey pointed out, “Why you take time off, what you use it for, how much you need, is so personal. So this idea of what’s reasonable? There is no single answer.”

For some employees, taking an afternoon off or several long weekends throughout the year might be ideal. Others need that two-week break to really unwind. The point of time off is that it’s restorative for the individual employee — and it’s up to managers to understand their individual needs and preferences.

2. Communicate the intent. Further up the chain, HR and upper management should clearly communicate the intent behind an unlimited PTO policy. “Unlimited” isn’t about the amount of time. It’s about the flexibility to use the time as it best serves each employee.

For many, being boxed into a typical 9-to-5 workday just isn’t realistic anymore. A flexible PTO policy can illustrate an employer’s authentic commitment to supporting a modern work-life balance.

According to Kensey, “It really does signal to our people that we understand how they work," she said. "The benefit of having an unlimited policy, or a more flexible policy, is that you really, truly are trusting your people to make choices that are best for them so they can show up as their best self to work every day.”

3. Empower employees to use their time. When trying to shape an organization’s business and culture, a lot of the work for leaders lies in unlearning past lessons and experiences along with their employees.

This may require shifting the organizational mindset, Kensey said, like encouraging them to use time off and not expecting them to be immediately available while on vacation. To the end, some companies are also playing with the idea of implementing a “Required PTO” policy to ensure all employees are taking a minimum amount of vacation days.

4. Uncover the root cause of challenges. As with any workplace policy, an unlimited PTO policy may have some hiccups. It’s important to get to the root cause of the problem in order to fix it. Our experts offered solutions for some of the most common PTO challenges outlined below.

Addressing Common PTO Issues

THE ISSUE: An employee’s usage of PTO is raising eyebrows

A new employee takes a week off. A month later, they take another week. Team members seem surprised and complain to their manager. What's at the root of those negative feelings?

More often than not, if an employee’s time off is disgruntling the team, it’s related to performance, JD revealed. Is the employee leaving others scrambling while they’re away, or not pulling their weight on a daily basis? Conversely, when an employee’s performance is up to par, and work coverage is well planned before taking time off, other team members won't feel slighted.

THE ISSUE: Pockets of employees aren’t taking time off

“When people aren’t using time off, investigate why,” Kenzie advised. A variety of factors could be at play:

• They don’t feel the need to use it
• They’re getting a subliminal message that it’s not okay to use (e.g. a high performer rarely takes a break).
• They need to have the policy clarified
  

When pockets of people in an organization aren’t taking time off (whether by team or department), it's an indicator for managers to uncover the root cause and address it. If there’s a trend throughout the entire organization, HR should step in.

THE ISSUE: Taking time off feels like more work

Often, taking time away from the office entalis hours of work to prepare for it, creating more stress and defeating the whole point of taking a break. “Look at this as a business-level problem,” Kensey advised, “and explore ways to create an environment where it’s not hard work to take a day off.”

Strong communication among team members — and having enough team members to fill in when there are gaps — is essential. Ideally, there should be clear processes in place so nothing major slips through the cracks when an employee is out.

“We need to really understand why our teams feel that way, and how we can create processes, structures, and mechanisms that make it easier to take time off while also ensuring that your work is able to be covered,” she continued.

Final note: Ask for feedback

Getting employee feedback is crucial to shaping an effective PTO policy and guiding the way it’s presented. When asked about the value of employee surveys, Kensey had this to say: Employee surveys are a great tool as long as they’re clear (they shouldn't scare employees into thinking that the benefit is about to be taken away), and they're designed to gather actionable data so the results can be used effectively.

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What’s your take on unlimited PTO? Let us know in the comments of the full episode!

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