Should you be saying 'Yes' or 'No' to Unlimited P.T.O?

What is unlimited Paid time off (PTO)?

Providing unlimited paid time off (PTO) is about allowing fully paid leave, for whatever your employee requires it for, without providing a specific number of days for them to take their annual allowance from. This could be for sickness, vacation, bereavement or any other kind of leave request. It’s a concept that many employers may struggle with and arguably it’s a valid concern that some employees could take advantage. So should you be applying unlimited PTO as part of your people management strategy?

Could providing unlimited PTO make your employees more productive?

Unlimited PTO is somewhat controversial. It requires a trusting culture where managers are allowing employees to be fully in control of managing their own workload and that they want to do their job well. It’s been widely discussed that some individuals may even be more productive if they work fewer days or hours by up to 20%, meaning your business is operating with potentially reduced costs (due to a potential reduction in the use of sundries, electricity and facilities) and increased productivity. There’s also a possibility that some staff would take less time off, according to Forbes and The Guardian, with some companies forcing employees to take a minimum amount too.

The trust argument

Whether or not you think that’s a good thing is debatable, but allowing individuals to manage their workload throughout the year whilst allowing a work-life balance they can choose definitely shows a level of trust that would increase engagement in your employees. Employees who are truly engaged in their career and business values are much less likely to take advantage, which is partly down to employee engagement levels. If your employees are engaged in your business and want to remain employed there’s an argument that you should allow them to manage their time most effectively.

To the younger generations, work-life balance is one of the most important perks you can offer and show as a company that you allow for your employees to take paid leave whenever they require a break shows that the well-being of your employees features highly on the company agenda. Both these points will make your company more attractive to new hires.

Unlimited does not actually mean unlimited time off

However, obviously, “unlimited” can’t really mean that you’re allowing each individual employee to take 365 days a year and still get paid! You will still need to ensure full cover for specific projects, sales and support teams particularly throughout your busy period, which could even be around the festive period or school holidays depending on your business, meaning that employees could feel they were missing out on peak holiday times if several individuals request time off. Therefore your company policy on unlimited PTO needs to be clear cut with any potential restrictions you’ll need to put in place, ie ensuring that your company documents on unlimited PTO are easy to access and clear enough for all to understand and agree to.

How to ensure fair use

Finally, how can you ensure you’re tracking that individuals aren’t abusing your unlimited PTO policy? This requires tracking your paid time off in leave management software. This means that employees should still be requesting time off, and having it approved by the appropriate managers before confirming the leave request.

Ultimately, to maintain their position in your company your employees still need to do their job and keep up with their performance goals. If you feel your staff require unlimited PTO to relax and recharge at their own pace then it might be the right strategy for you. However, it can be tricky to manage so ensure you have the right absence management software in place to track time off accordingly and ensure that your unlimited PTO policy is clearly accessible to all.

How Appogee HR can help you with absence management solutions

With Appogee Leave you can easily track and report on all types of staff leave from holiday, sickness, working from home (and more), and offers you an all-in-one fully customisable leave management solution. Try us today for free! Start your 14 day free trial here, alternatively book a free personalised demo with one our HR Transformation Specialists.