Why Unlimited PTO Won't Solve America's Burnout Crisis

America has a problem with employee burnout. It’s something we’re all aware of, but often choose to ignore as a key cause of attrition within our workforce. We explored the sources of burnout in the American workforce last week on the blog. Today, we’re taking a look at solutions.

Paid time off (PTO) and vacation as an extension arguably are the keys to solving burnout. 78% of HR leaders say employees who take advantage of available vacation time enjoy higher job satisfaction and 75% report that employees who take more vacation time perform better than those who take less. In fact, the majority of managers believe that employees return to work more focused and committed after a vacation and that it directly affects their health and productivity. So, the question becomes, what can we do to get employees to use more time off?

Today, we're hearing a lot about unlimited paid time off. This liberal vacation policy is viewed as forward-thinking and 'hip', often employed by silicon valley startups or millennial-directed companies who place a large emphasis on culture and work-life balance. At first glance, this perk seems like a winning solution to burnout. However, we took a deeper look at this policy and found that not only did it fail to increase the number of vacation days used by employees, but the motivations behind offering it were often not tied to culture.

A core motivation for offering unlimited PTO lies in the hidden risk sitting on balance sheets from unused vacation time. When an employee leaves a company with unused PTO on the table, employers are required to pay them out for leftover days. Unlimited PTO relieves employers of an average of $1,898 in liability per employee, since there are no unused days to pay out.

Of course, there are positive outcomes of this policy, whatever the motivation, which are tied to employee happiness. Many see it as a way to build trust between management and employees. Everyone is responsible for managing their time away from work respectfully and reasonably. We agree that sending this message is enormously valuable in changing employees' perception of how their organization views time away from the office, which ultimately impacts culture. But this isn’t the whole picture and it certainly does not produce the same benefits as employees actually taking time away.

Often, companies don’t see an increase in vacation days used when they implement an unlimited PTO policy. Occasionally, unlimited PTO even discourages vacation. Without clear guidelines, folks are overly conscious of whether they’re taking more or less time than their colleagues and are unsure of how individual managers will perceive their work ethic, depending on how much time they use. Some companies combat this by coupling unlimited PTO with vacation minimums, offering stipends to employees who take vacation or implementing company-wide shut downs for a week or two at a time. These types of policies go one step further than saying “we trust you to take the appropriate amount of vacation” to “we actively encourage you to take that vacation.”

We’re in need of innovative solutions to burnout that encourage folks to maximize existing days off, because offering them more time doesn’t necessarily drive wellness. Many companies can’t afford to shut down just to get their employees to take a break, and they shouldn’t have to. Instead, employers should be investing in employee vacation beyond paid time off. 80% of employees would be more likely to take time off if they felt fully supported and encouraged by their boss; and with innovations like travel benefits, organizations can now communicate that support and make a strong statement around wellness without much effort.

While when implemented correctly, unlimited PTO can be a tool to create a positive company culture, it doesn’t encourage employees to use vacation time like one would hope. Often, an additional catalyst is necessary to get folks to actually leave the office and unplug. If we truly want to focus on employee wellness, drive positive culture and reduce burnout, there has to be a shift in mindset around vacation. Company policy needs to reflect the knowledge that using paid time off benefits everyone. We have to make sure the message isn’t just sent, but received.

Author image

About Zoe Pilla

Zoe comes from a background in non-profits and education. She's passionate about all things social-minded, travel and outdoors. Up next on her travel list, South America: Machu Picchu and Patagonia.
  • San Francisco, CA