Inside a company that offers Unlimited PTO

By Bond Collective Staff

Unlimited PTO is quickly becoming the most sought-after benefit in many industries. Businesses are using this perk to attract top talent and get an edge on their competitors.

But is unlimited PTO the right choice for your business?

In this article, we provide the pros and cons of this leave program so you can make the best decision for your team and your company.

What Is Unlimited PTO?

A lunch area inside a company that offers unlimited PTO

Unlimited PTO is a leave system that allows team members to take off as many days as they need for events such as:

  • Illness

  • Vacation

  • Jury duty

  • Maternity/paternity

  • Caring for a sick family member

Most businesses stipulate that an employee must maintain their normal work hours and meet performance expectations over a specific period of time in order to qualify for this type of paid-time-off program, but your company can set whatever expectations it feels are best.

Unlimited PTO: Pros For Employers

A chart analyzing the benefits of Unlimited PTO

1) Decreased Capital Liability

With a “regular” paid-time-off system, accrued vacation time becomes a very real capital liability. It can sit on your bottom line for years and complicate your bookkeeping like nothing else.

In addition, your business may be obligated to remunerate employees for the time off they didn’t use when they retire or leave for another job.

Unlimited PTO allows you to reduce that capital liability to essentially zero because you don’t have to accrue time-off hours and transfer them to the new year nor assign them a dollar value should the employee choose to take another position outside your business.

2) Improved Administrative Efficiency

In some businesses, keeping track of the accumulated time-off hours available for each employee in a typical PTO system is a full-time job. It may even take a team of specialists to manage and coordinate your leave program.

With an unlimited PTO benefit in place, you eliminate the need to track, record, and manage the hundreds — if not thousands — of hours of leave allotted to your team each year.

That frees up any number of human resource employees to focus on other issues and improves administrative efficiency in every corner of your business.

3) Heightened Employee Satisfaction

The standard PTO program — finite sick days, personal days, and vacation days — often leads to employees giving less than 100 percent during slow times, and maybe even burning out during busy times, because they want to save their time off for something really important or worthwhile.

In essence, they report to work and appear busy in order to preserve their PTO for later instead of taking a day off, recovering, and coming back the next day ready to work.

In an unlimited PTO system, an employee is more likely to take time off between the end of one project and the beginning of the next because they don’t have to worry about running out of hours.

When your employees don’t have to consider how much PTO they have left, their happiness improves. That, in combination with an improved attitude and energy level after a day off, results in a productivity boost you can’t get any other way.

4) Enhanced Recruiting

Businesses that have an unlimited PTO system in place stand out from the crowd because this type of leave program isn’t something that every company offers.

Most businesses do offer some form of PTO, but an unlimited plan is very enticing to those looking for a job in your industry.

The fact that you offer infinite time off is an asset you can use to enhance your recruiting and improve your talent acquisition.

5) Increased Retention

Employee retention is a very real problem in today’s competitive business market.

Many employees will stay at a company with unlimited PTO rather than looking for a new job because a generous leave like this policy allows them to maintain a healthy work/life balance.

That combination of perks — plenty of paid-time-off and a healthy work/life balance — can increase retention and help you maintain a productive team for years to come.

Unlimited PTO: Cons For Employers

Old school alarm clack

1) Complicated Scheduling

Unlimited PTO can create a nightmare of scheduling issues that lead to overlapping vacations, lack of employees with specific skills, and missed deadlines.

Not only does this put an undue burden on your HR department, but it also affects the team members who are working because they have to pick up the slack for those who are taking time off.

2) Potential Abuse

With unlimited PTO, there exists a very real possibility that an employee will abuse the system and take weeks or even months off without fear of losing their job.

You can prevent this type of activity by reviewing the program frequently and by talking with employees about the importance of using only what they need.

3) Difficult Implementation

Switching from a traditional leave program to unlimited PTO can be difficult for your team and your business.

As mentioned above, there’s always the fear that employees will abuse the system and take time off at the same time, but other difficulties include:

  • Loss of accrued PTO that employees had been saving

  • Employees feeling uncomfortable taking extended time off

  • Stigma attached to taking time off under the new program

These, and many more variables, make implementing a system like this daunting and difficult for many businesses.

4) Leadership Concerns

Many businesses that have an unlimited PTO program in place discovered that employees aren’t taking advantage of the time off because of how they think management and their coworkers will react.

In these situations, it has become obvious that leadership plays a critical role in setting an example for how to use the PTO system.

For example, if a manager takes few or no days off during the year, members of that person’s team may develop the idea that the manager doesn’t approve of time off.

This idea develops further into the misconception that, should they take a vacation day or two, they will be in the manager’s bad graces.

The way your leadership treats the PTO program has a lot to do with how your team members treat the program.

5) Employee Confusion

Even though the concept of the unlimited PTO program is fairly straightforward, employees can be confused as to the finer points of the system.

They may wonder how much PTO they can use at any given time or when they should schedule that time so as not to hurt the business.

Confusion of this sort often leads employees not to take time off — even when they need it — because they don’t understand what the business expects of them.

Is Unlimited PTO Right For Your Team?

Employer thinking if Unlimited PTO is right for his team

Unlimited PTO isn’t for every business. Yes, there are some significant pros — and some significant cons — but it all comes down to whether or not this type of benefit is right for your team.

Your company may do better granting four sick days, four personal days (e.g., mental health days), four holidays (e.g., Christmas, Thanksgiving, New Years, etc.), and five vacation days.

It all depends on your company culture, the diversity of your team, the personalities of your employees, and even the location of your business.

The nice thing about an unlimited PTO policy — or any paid-time-off policy, for that matter — is that you can always tweak and refine the guidelines if it’s not working.

Put a system in place, keep track of the results, and revisit the issue in a year’s time.

Other Equally Important Benefits

Inside coworking space at Bond Collective

During the time that you’re testing and perfecting your time-off policies, it’s also crucial to focus on a resource that will increase happiness, productivity, and engagement more than few other benefits your business offers: your team’s workspace.

While your employees may only avail themselves of your unlimited PTO a few times a year, they engage with their workspace every day.

The coworking spaces at Bond Collective are the perfect solution for all your workspace needs.

They provide community spaces, hot desks (available on a first-come, first-served basis), dedicated desks (i.e., reserved), private offices, conference and meeting rooms, private phone booths, unrivaled amenities, and much more — everything your team needs to perform at their best.

Visit any one of Bond Collective’s many locations in the United States, including workspaces in New York, Pennsylvania, Washington D.C., Illinois, Tennessee, and Texas. Or call us today to find out more about everything we have to offer.

And while you’re at it, schedule a tour to experience first-hand how the boutique work environments at Bond Collective can benefit your business.