If you saw a job posting that mentioned unlimited PTO as a benefit, chances are you wouldn’t be able to apply fast enough. After all, just think about how much you could get done if you weren’t limited to the weekends. While unlimited PTO sounds great, there are strings attached to using this so-called benefit that all employees should be cognizant about.
First, let’s answer the real question here: what exactly is unlimited PTO? Despite its increase in popularity, it’s still a term not many employees are familiar with. Unlike traditional PTO which allocates a specific number of days off per year, companies offering unlimited PTO grant employees the option to request and take off as much time as they need as long as it does not affect or interfere with their ability to get their tasks done. Herein, lies the problem with unlimited PTO.
On the surface, it seems like one would just be able to call in and take a personal day, however, granting PTO is up to the discretion of the employer. Furthermore, employees must coordinate time off ahead of time with their co-workers to make sure important tasks don’t slip through the cracks. Simply put, unlimited PTO isn’t technically unlimited. Rather, it just doesn’t put a hard cap on the number of days you’re solely allowed to use in a given calendar year.
Unlimited PTO is attractive to new job applicants. According to a 2015 report by Glassdoor, 60% of people cite a company’s benefits package as a key factor in deciding whether or not to accept a job offer.
Realistically speaking, the majority of people aren’t obtaining employment because it’s their passion. It’s expensive to live, and so having a job is necessary. Recruiters know this, which is why they will lead with their most enticing benefits to lure candidates through the door. This is why 80% of employees surveyed by Glassdoor would rather get additional benefits than a pay increase.
Whereas a pay increase may help out financially, having flexibility in regards to your schedule has been more enticing for employees who have young children, are taking care of elderly parents, or pursuing an education. With the lure of unlimited PTO, employees don’t feel like they’re torn between choosing their 9-5 or their personal life.
Here are five important things you need to know about the latest marketing tactic that’s taking the workforce by storm.
The first thing you need to know about unlimited PTO is that it’s not something every company offers, nor is it going to be. A 2021 paid leave survey conducted by XpertHR learned that a mere 4% of the 639 companies they surveyed offered this unique benefit. And the reason why is simple: paid time off is cash compensation. The more time an employee takes, the more money is coming out of the employer’s pocket.
That’s why unlimited PTO is more common amongst multi-billion dollar corporations such as Linkedin, Netflix, Chegg, and Twitter. These companies have The resources and capability to offer such benefits; a locally owned mom-and-pop shop or small non-profit will probably not share the same advantages as these multi-million dollar corporations.
After hearing that the company offers unlimited PTO, you wouldn’t be wrong in thinking that you can take off as much time as you need. And maybe you were fortunate enough to come from one of the big companies above that didn’t really put a cap on things as long as you got your work done. However, if you previously worked at a company that offered unlimited PTO, don’t expect them to follow the same kind of policy. Simply put, it’s going to be different at every company.
When it comes to unlimited PTO, most employers don’t mean unlimited in the true sense of the word. If that were the case, then chances are, no one would come to work ever. Rather, they have an acceptable amount of time off in their heads, so it’s in your best interest to ask them upfront what they believe is reasonable.
For example, if they say that three weeks of vacation/personal time is reasonable, then stick to that when requesting time off under this unlimited PTO policy.
Though it sounds a tad counterintuitive, many employees may feel uncomfortable taking advantage of unlimited PTO for fear of retribution or looking bad to their bosses. People tend to naturally gravitate toward boundaries and like knowing where that line is so they don’t accidentally cross it. This is one of the biggest disadvantages of unlimited PTO because if the company doesn’t properly explain what is reasonably expected of their employees, it can make employees fearful of taking advantage of something owed to them.
In fact, a 2018 study by Namely found that employees that are offered unlimited PTO take 13 days off per year as opposed to the15 days that are offered with traditional PTO.
The workplace has changed since the COVID-19 pandemic. With more employees working from home, employers who may have been previously skeptical of remote employment have seen the benefits of adopting a more flexible schedule. Part of what makes remote employment so enticing is the fact that it gives employees the ability to sleep in later, get something to eat at their leisure, and tend to other household tasks as needed instead of pushing them off to later.
These freedoms have increased employee morale and productivity and that’s what unlimited PTO is designed to offer, as well. Since employees have to, for lack of a better word, get all their ducks in a row before taking time off, they’re more likely to complete their tasks ahead of time. Furthermore, as to not jeopardize their ability to take time off or damage their reputation, most employees will go above and beyond to look good to upper management.
I guess technically you could say this about everything, but since unlimited PTO leaves so much up for interpretation, the pros and cons of it really have to be weighed by both employees and their employers.
First and foremost, it saves companies money since they don’t have to pay for unused PTO at the end of the year. It also allows employees to leave work…at work, as opposed to bringing their tasks home with them (a reality that many remote employees have faced since the onset of the pandemic).
The biggest disadvantage, however, is the fact that it can be abused by staff members if basic parameters aren’t set upfront. For example, a manager who approves two employees off at the same time can create an extensive workload for the ones back at the office. A situation like this can be exacerbated if the employee using PTO failed to get their work done on time or left a task in process for the rest of the team to try and deal with. This can lead to stress, animosity, missed deadlines, and inefficient use of unlimited PTO. Worse, it can negatively affect client projects and meetings.
Unlimited PTO Has Its Pros and Cons, But It’s Really Up to the Employer to Decide if it’s Worth It
Ultimately, the decision to move forward with unlimited PTO is up to the employer and whether or not they see the value in it. This benefit can work if reasonable expectations are outlined in the beginning, especially if the supervisor utilizes this system themselves. Employees are more likely to engage in the same behavior as their supervisor, so if they complete the work in a timely fashion and take off a reasonable amount of time, the employee will likely follow suit.
Having the flexibility to take time away from your desk in a society that seems to make relaxation impossible has a nice ring to it. Only time will tell if more employers begin to take advantage of it.