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The Pros and Cons of Unlimited PTO

Labor shortages across the country have pushed businesses to get creative. While unlimited time off may not be new, it’s a perk that more employers are starting to consider. Unlimited PTO may seem like the perfect solution on the surface, but there are drawbacks to consider with it. Consider these pros and cons before implementing an unlimited PTO policy.

The pros of unlimited time off

Unlimited PTO was created to encourage employees to take time off when they need to. Here are some benefits of unlimited PTO:

1. Impact on retention and recruitment

Companies are constantly having to think of new ways to recruit and retain employees to stay competitive in their industry. With employees reconsidering their priorities, companies need to hit the target when it comes to employee benefits. In a recent study from Business Insider, 68% of surveyed workers said that they would “consider changing careers” and they’d rather have a better work-life balance than get paid more.

Whether or not unlimited PTO is the best answer to achieving work-life balance truly depends on how a company enforces its policy. But, the fact remains the same, job seekers are certainly intrigued by the idea of unlimited time off.

2. Increases productivity

Employee burnout has been at an all-time high since the beginning of the pandemic. Because of this, employees value their time off more now than they did prior to the pandemic. Having unlimited PTO offered to them gives employees the option to take as much time off as they need for their mental and physical health.

3. Builds a level of trust

When employees feel trusted, they are much more likely to reach a higher level of productivity. By offering unlimited PTO, you are letting your employees know that you trust them to manage their own time off.

Employees can easily manage their own time off with time and attendance software. When an employee requests time off, managers are sent an automatic email to view the request. Managers are also able to view scheduling conflicts to make sure that they aren’t left short-staffed.

The cons of unlimited time off

Unlimited PTO is meant to help employees improve and maintain their work-life balance. Implementing this policy may not be as clear-cut as it seems. Here are some drawbacks of unlimited PTO:

1. Employees could abuse the policy

As with anything, if you give certain people an inch, they will try and take a mile. Without clear rules on your unlimited policy, you could quickly find yourself in a pickle with one or more of your employees. Before implementing this policy, ask yourself if your staff could balance their work while taking more time off.

2. Employees may use less time off

While requesting time off isn’t an issue for some employees, many people struggle with it. In fact, taking time off can leave employees feeling guilty, especially when management doesn’t take time off for themselves. Due to these policies not having a set number of days, employees may not know when to ask for time off, resulting in them taking even fewer days than before.

3. Different managers, different perceptions

Everyone has a different perception of time off. Some managers may encourage taking more time off. Other managers may not be as willing to approve time-off requests. Unlimited policies could lead to employee A getting more time off than employee B, causing employee B to become jealous and bitter towards their manager. This would be counter-productive and would hurt your workforce.

While unlimited PTO may seem like a great retention effort or a way to increase productivity, it also has the potential to negatively affect your employees. Talking to your employees about it is a great place to start before deciding if it is right for your company.