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Dec 14, 2022

Over the past two and a half years, it’s fair to say workforces from all sectors have undergone a rapid and fundamental transformation.

Employees expect more autonomy and flexibility than ever before and, as such, they’re reconsidering their benefits packages. When they find they’re not up to scratch, they’re leaving their jobs in record numbers.

The logical conclusion of this is that companies will have to focus more on how they’re supporting their workforces – from the benefits they offer to how they engage with employees.

Unlimited PTO is on the rise…

One way HR teams are attempting to meet the shifting demands of their employees is by revamping their paid time off (PTO) policies.

But it’s ‘unlimited’ PTO, in particular, has become increasingly popular among companies and employees. Many HR teams view it as a way to attract and retain employees with the promise of flexible scheduling and vacation time.

According to Glassdoor, discussions about unlimited PTO have steadily increased: the number of reviews that mention unlimited PTO jumped almost threefold between 2017 and 2022, and many of these reviews regard the policy as a selling point.

A Harris Poll survey reports that employees would even be willing to take a pay cut in exchange for unlimited PTO. In addition, a 2022 survey conducted by Hired found that PTO was the second-most compelling benefit, and many employees believe companies should offer flexibility in how they take time off.

..but it’s not the answer

Despite all the reasons above, I believe unlimited PTO has more drawbacks than benefits.

While unlimited PTO may sound like the ultimate form of flexibility, in my view it can actually increase constraints on employees and lead to cultural problems.

There are two main issues why:

Employees feel ‘always on’

When employees have unlimited PTO, they’re liable to feeling like they’re “always on,” – even when they’re off the clock.

We already know (again from Glassdoor) that 54% of employees don’t believe they can “fully unplug from work” when they take time off.

Unlimited PTO can make unplugging from work even more difficult, as some managers will expect employees to remain available to offer assistance on urgent projects and other priorities. Hence, employees will always feel pressure to check their phones and email to see if they’re missing anything when they’re ostensibly taking time for themselves.

Even when managers avoid pestering employees, it’s impossible to determine how much PTO is actually acceptable, as this is dependent on each employee’s unique workload, company expectations, and how different teams function.

This is why unlimited PTO is an illusion – while it sounds attractive to job seekers, the reality can be less freedom and more stress at work.

It blurs how much vacation time people feel they can take

At a time when employees are making work-life balance a top priority, unlimited PTO also blurs the line between the office and vacation, one of the factors driving the recent “quiet quitting” movement.

Let’s look at this in more detail: While a standard PTO policy helps employees strike a better work-life balance, unlimited PTO can have the opposite effect.

With unlimited PTO employees will feel pressure to cut their vacations short – or refuse to take them at all – to remain competitive with their colleagues and avoid upsetting their managers.

They’ll worry about unfinished projects and check their phones more often, and they won’t take the hard-earned time they need to fully recharge. And the less time they have to recharge, the more burnt out they’ll feel, which could result in quiet quitting altogether.

PTO is already an extremely under-used benefit, with hundreds of millions of vacation days left on the table every year.

Offering “unlimited” PTO won’t address this problem – it will make the problem worse.

What’s needed is a different approach

Employees have never been more focused on balancing the demands of work with their personal lives. According to a recent Forbes Health-Ipsos survey 90% of respondents say “work-life balance is an important aspect of their job.”

But what employers really need to do is give their employees clearly defined benefits and allow them to take guilt-free time off without pestering them.

This means establishing clear policies and procedures around PTO, and not offering unlimited PTO. It means telling managers they shouldn’t contact employees who are on vacation, and encouraging employees to take guilt-free time off.

It also means providing flexible benefits such as convertible PTO, which tracks the hours employees have earned and allows them to reallocate those hours to other priorities.

In other words, it’s time for HR teams to build company cultures that allow employees to take PTO without feeling guilty or tethering themselves to work when they’re on vacation.

When employees feel like they can take the time they need, they’ll be more productive and loyal to the company – a crucial advantage to retain employees in a period of high turnover and extreme competition for talent.