More employers have joined the movement to increase work-life balance by offering unlimited paid time off (PTO). Companies like GE, Kronos, and Netflix provide their employees with a variety of discretionary time off benefits.
What are the pros and cons of unlimited PTO? Further, how are human resources administrators effectively managing and tracking unlimited vacation to ensure that every employee has an opportunity to enjoy this unique benefit, while still maintaining productivity?
The Good and the Bad of Unlimited PTO
As with any benefit, there can be potential pitfalls or positive results that occur. It’s up to employers to determine if unlimited PTO is a good option, or not.
The Pros of Unlimited PTO
For employees, having access to unlimited paid time off allows them to manage their personal responsibilities. It’s an impressive benefit that can attract talent, particularly Millennials and Generation Z candidates who value work-life balance above all other perks.
Project Time Off data indicates more than half (52 percent) of Americans leave vacation days on the table every year. HR can encourage people to take advantage of this benefit so they get their fair share.
Employers know a happier workforce results in increased productivity and higher levels of engagement. Dr. Noelle Nelson, Clinical Psychologist and the author of Make More Money by Making Your Employees Happy told The Balance, “When employees feel that the company takes their interest to heart, then the employees will take company interests to heart.”
An effective unlimited time off program can keep the workforce healthier (no more working sick), supporting wellness initiatives and reducing health insurance and lost productivity costs.
The Cons of Unlimited PTO
The idea of managing unlimited time off can be cringe-worthy for HR. An informal system won’t do. Making sure that all employees are handling their tasks, checking in with supervisors, and maintaining enough of a team structure requires better tracking. And employees don’t want to feel as if they are being continually scrutinized for taking time off.
How can HR ensure that the paid time off policy is not being abused? If an employee is already on an FMLA approved leave and then suddenly decides he or she needs more time, how can that be prevented?
On the flip side, Katrina Kibben, CEO and Founder of Three Ears Media shared with BambooHR, “When people are shamed into taking time off with a side of guilt, the result is that it causes burnout and retention issues.”
The PTO plan must cover all employees to avoid discriminatory practices. The program needs to be highly visible and continually communicated by management so that all employees understand how to use it.
And how about the growing number of workers who are choosing remote employment options — how can HR track their use of unlimited vacation if they are not physically present in the office to keep an eye on?
Unlimited Paid Time Off Management
Each organization must decide if offering unlimited paid time off has more pros than cons. The use of PTO-management software can eliminate many of the cons of offering this benefit. By streamlining the processes of both requesting and approving time off, management can easily handle workflows, communicate, and ensure everyone gets a chance to participate, while preventing abuse.
If your organization is struggling to make an unlimited paid time off policy work, PTO Ninja can help. Our solution can help you keep an eye on and track unlimited PTO (right in Slack) in a way that provides value for employees and reduces the notion they are being tracked. It also provides a way to make sure all employees get to enjoy a reasonable amount of paid time off so that they are restored and happier.