June 21, 2022
What Are the Best Alternatives to Unlimited PTO?
It’s one of the biggest employee wellness trends today – unlimited PTO. Yet some companies, though th...
Unlimited PTO is a growing trend in workplaces today. It’s a progressive system where, instead of limiting the number of paid days off given to employees, you remove any hard limits and offer greater flexibility and freedom in regards to time off instead.
Proponents of unlimited PTO say it’s a positive and worthwhile employee benefit, and a great way to encourage better work-life balance. Yet others claim it’s a bad idea, and hurts the company, its employees, or both.
To help better understand the value of unlimited PTO, and whether it really is a benefit that today’s businesses should offer, we collated a bunch of interesting statistics and data on the topic. These facts should give you a broader idea of what people really think about working in a business with an unlimited vacation policy.
Read on to learn more about unlimited PTO, statistics related to unlimited PTO policies, and how to navigate this type of leave policy in your business.
Unlimited PTO is a divisive topic. A lot of people have a firm stance on it, either for or against.
The “pro” side claims that unlimited PTO is great for employees’ work-life balance. It allows greater freedom to take breaks and switch off from work, improves productivity and reduces the chance of burnout.
There’s the belief that it’s a strong tool for recruiting and retaining the best talent, who are more likely to choose a job offer with unlimited PTO than one with a more restrictive leave policy.
Yet a lot of people also claim that unlimited PTO is a trap. That, realistically, it tricks employees into thinking that they can take leave whenever they want, but actually ends up pressuring them into taking less time off.
These people fear that unlimited PTO is too easy to abuse, for employers or employees. Either employees take too much time off and abuse the system, or employers subconsciously make their staff feel bad for taking PTO.
So, is it a good idea or a bad idea?
It’s somewhere in the middle. Unlimited PTO can certainly go wrong, if you have the wrong people in place or the wrong circumstances. But it can also be a really positive benefit for the right team, and can boost morale and productivity in a powerful way.
It all comes down to how you manage your unlimited vacation policy, as we’ll touch on a little later.
Now, what does data tell us about unlimited PTO? Let’s take a look at a few key areas.
Is unlimited PTO something that’s important to employees today?
The data says yes.
A MetLife survey found that unlimited PTO was the #1 most valued emerging employee benefit. 72% of the surveyed employees said this was a benefit that interested them – ahead of wellness programs, phased retirement and paid sabbaticals.
Streaming services Netflix and Roku both offer unlimited PTO to their employees. Employee surveys show that the unlimited vacation policy is the #2 most valued non-healthcare employee benefit at Roku.
At Netflix, it’s #1.
How common is unlimited PTO today. And is it really a growing trend?
According to CJC Human Resource Services in New York, the unlimited PTO trend first started to appear substantially in 2013.
In 2016, a SHRM report found that 1% of the companies they surveyed offered unlimited PTO. The same year, 3 of Fortune’s 100 best companies to work for had unlimited vacation policies.
Unlimited PTO policies have definitely been trending up for a long time. Between May 2015 and May 2019, US job postings that offered unlimited PTO rose 178%, from 450 per million to 1300 per million.
Between 2017 and 2018, UK jobs boards saw increases between 10-20% of listings offering unlimited PTO.
Unlimited PTO is most common for tech jobs. Jobs for software engineers and data scientists are six to eight times more likely to offer unlimited PTO.
Yet non-tech jobs offering unlimited vacation rose from 61% in May 2015 to 65% in May 2019.
And now, what happens with businesses that implement unlimited PTO?
Is it generally a success? And what happens to the average PTO taken? Does it go up, or down?
A study from Namely showed that employees with unlimited PTO took an average of 13 days PTO per year, compared to 15 days for employees on regular PTO plans.
Many of Salesfusion’s staff also started taking fewer vacation days when they switched to unlimited PTO in 2019.
Staff at firm CharlieHR took less holiday time when they offered unlimited PTO, and reported anxiety about not knowing how much vacation time was ok to take.
As a result, they ended up revoking their unlimited PTO policy, changing to a leave policy with generous limits instead.
It’s not all negative, though. When Kronos introduced an unlimited vacation policy, they saw the average number of vacation days taken rise from 14.0 to 16.6 days per year.
And at Ask.com, they save a total of 52 HR hours every year, but not having to track how many vacation days are used, since they switched to an unlimited PTO policy.
Unlimited PTO can have big benefits, such as:
But it’s clear that unlimited PTO policies need to be handled correctly. If not, you run the risk of making employees anxious and uncertain as to where they stand and how much leave they’re allowed to take, and unlimited PTO becomes a source of anxiety for team members.
It can also go the other way, where employees abuse the system and take too much leave. But this appears to be far less common.
So, the biggest struggle is ensuring that employees take enough time off. To do this, you’ll want to set clear expectations from the outset.
Let your team know that it’s not technically unlimited – they can’t just take 75% of their working days off. But it’s also expected that they will take some time off, and they shouldn’t be afraid to ask for time off.
You may also want to make regular check-ins with employees who don’t take leave very often, and encourage them to take a break.
Some companies even offer incentives to take PTO, or company-mandated minimums.
Whatever it is you do to make your unlimited PTO policy work, it requires both employer and employee to be progressive, mature and understanding. It requires everyone to work together to push the company forward.
Even though you don’t need to track vacation time as closely as if it were necessary for payroll, you’ll still need to keep records.
This is so you can identify any trends, either of staff taking too much leave, or not enough.
You’ll want to use a leave tracker like Flamingo, particularly if your team is on Slack. Flamingo is the easiest way for Slack teams to track paid time off, and is perfect for startups with unlimited PTO.
Flamingo rips down any friction involved with asking for time off, by letting staff request PTO asynchronously through Slack. It automatically fills leaves to your team vacation calendar, and allows managers to pull up reports at the click of a button.
A vacation tracker software is essential for small startups, or even mid to large sized companies with full HR teams. It saves your team a huge amount of time, which can be directed towards more useful tasks.
Free trial. No credit card required.