Indeed’s Unlimited PTO Is a Win For Everyone

When was the last time you took a vacation from work? Chances are, if you did, it wasn’t very long and it wasn’t a “real” vacation, i.e. you didn’t completely unplug from work. You are not alone.

Paid time off is one of the most desired employee benefits, according to Society for Human Resources Management (SHRM) data. But, the notion that Americans fail to take all of their vacation days is true for many workers. A recent Indeed survey found that half of full-time employed adults don’t use up annual vacation and personal time available to them. Further, 59% do work-related business while on vacation.

Note: This has been a trend for several years. See “Why Are America’s Workers Giving Back So Much PTO?”

That’s why we’ve taken a different approach to vacation benefits at Indeed. We want rested, empowered, and motivated employees. To help encourage employees to take time off, we instituted a new open paid time off (PTO) policy beginning in 2016. Under this policy, employees can take as much time as they wish – for sickness, personal days or vacation days. There are no limits.

In our new policy’s first year, we saw a marked improvement in employee leave patterns – a 28% increase in the number of days taken off as compared to the prior year. This increase occurred across functions, levels and regions.

Admittedly, unlimited paid time off is a big step. We are one of only a handful of companies with this type of policy. SHRM data suggests only about 1% of employers offer unlimited paid time off. Meanwhile, the typical American worker employed for five years is eligible for about 12 vacation days per year, according to the Bureau of Labor Statistics.

Yet, after one year, we are convinced that our new policy is a success. Indeed employees took what we consider a healthy amount of time off, and were simultaneously very productive. During 2016, the first year under the new policy, Indeed increased headcount to over 4,000 employees, opened new offices and boosted monthly visitors to its website to over 200 million.

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Successfully implementing an open PTO policy takes a concerted, firm-wide effort. Here are some aspects of our plan that we believe are central to its success:

  • The shift to open PTO must be cultural to be effective. A mission-driven corporate culture is helpful, where employees know their goals and are inspired to reach them. At Indeed, the unlimited vacation policy reflects our core mission of helping employers attract the talent they need, and jobseekers find work that they enjoy. We want to try to create a great work environment for our employees so they can, in turn, help others find great jobs as well.
  • Management must work closely with employees to plan time off. Our managers work closely with direct reports to plan the right amount of time to take, and when to take it so their absence will not negatively impact workflow.
  • Management should actively encourage employees to take time off to recharge. We track how much vacation time employees take, and ask them why if they aren’t taking a reasonable amount of time off.
  • Management should lead by example. Even senior managers need time away from the office. This time should be planned in a way that works for the team and individual employees. If managers can truly “unplug” from work, that is ideal.
  • Talk about the open PTO policy and be transparent with employees. If the head of HR is talking about it, it gets managers and employees on board. It’s important to speak passionately about it, so everyone is encouraged to take the time off they need.

If organizations set up open PTO correctly, it can empower current employees, make for happier workers in the long-term, and also demonstrate to potential talent that the company cares about the health and well-being of its employees.