Gini Dietrich

The Pros, Cons, and Policies of Unlimited PTO

By: Gini Dietrich | August 16, 2017 | 
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The Pros and Cons of Unlimited PTOIn several Facebook groups of which I am a member, there has been quite a bit of conversation about unlimited PTO (paid time off).

We had it. Then we severed it. Then we brought it back.

We severed it because former colleagues took advantage.

(No, you can’t take three months paid to prepare for your move and another three months paid after your move. That’s why we’re virtual. You can work from anywhere.)

We brought it back because *I* want unlimited PTO. And if I get it, it’s only fair everyone else does, too.

Today we have two rules: Only one of us can be out at the same time and your time off must be unplugged.

(Last summer, three people were out at once, and I worked a 130 hour week that week. Learned that lesson!)

As well, I will deactivate your email and Slack until you’re back if you can’t abide by the second rule. I have admin access and will use it!

As a business owner, I love unlimited PTO.

We don’t have to worry about tracking how much time you’ve taken, when you’re out of time or deducting pay when you go over, or the year-end rush to use up earned vacation time.

That’s dumb.

Just like it was dumb that I had to clock in by 8:30 every morning at my previous job, no matter how late I was in the office the night before.

Dumb.

We work in a service business with grown-ups.

I’m big on treating people as such.

(Unless they take advantage such as a six-month vacation to move to a new house.)

What is Unlimited PTO?

The concept began to be batted around about five years ago when virtual teams became more common.

The idea is that you can take off as many days as you need for things such as vacation and illnesses.

No, the idea is not that you take a six-month sabbatical (that’s a different benefit often offered to tenured employees).

The idea is that, rather than say you have 15 paid days off (not including holidays), you can take what you need.

For instance, early in my career, my apartment burned down.

The guy who lived above me was roasting a turkey overnight on his deck.

The coal grill caught the wood deck on fire, and the whole building burned down.

I woke up to three firemen coming in through my bedroom door (which would be fun in any other circumstance).

My company made me take vacation time to, you know, start my entire life over again.

I ended up not needing more than three days, but I have never forgotten how that made me feel.

If someone’s home burns down, I don’t want them to have to worry about whether or not they have the accrued vacation time to take.

Please deal with it. Come back to work when you’re ready.

There are lots of things in life like that—the things we have zero control over—that shouldn’t require us to take unpaid time if we haven’t accrued vacation time (or have already used it all).

The Pros of Unlimited PTO

There are so many pros of unlimited PTO.

  • People come back refreshed, reinvigorated, and creative. You do have to force unplugged time off for that to happen. Add it to your policy (see below).
  • It fosters a sense of trust in your team.
  • It encourages a culture of responsibility because people have to think about who will cover them while they’re out. They also look at how it affects the larger business, as a whole.
  • You can include it in your recruitment package as a benefit. Studies show, those who have it, rank it just below health insurance and 401K.
  • If you have an office (this is less a problem for us), it’s more likely people will not come to work while sick. I don’t want your germs! Stay home! But lots of people hoard their paid time off for vacation. Rarely do they use it while sick. Of course, being a virtual company, hardly anyone takes sick time (I did in February when I had the flu so bad I nearly died). You can easily work from bed if you feel up to it.
  • You don’t have to track accrued days against taken days. People can just take the time they need.

The Cons of Unlimited PTO

With the many benefits comes the dark side.

  • It’s possible someone will want to take a month off to hike Everest (me, me!), which could be a real issue for your organization. Your policy needs to state what is appropriate and what is not.
  • More than one person could be out at the same time, requiring the CEO to pick up all the slack (cough, cough).
  • You do still need to track to watch for abuse—and to prove compliance with regulations, such as family and medical leave and disability coverage.
  • You have to force people to take time off. One would think this is a pro, not a con. But there is a different mindset people have when they know they can take the time. Last year, I had to tell Corina Manea that she was not getting a raise until after she took at least a week off.
  • Employees may feel like they can’t take more time than the typical 15 days. They may feel like they’d be judged or perceived as a non-team player for doing so. To change that, it has to start at the top.
  • Some colleagues may take advantage. And not in the long weekend here or there way, but in six months out of the year to move to a new house way. The good news is that when someone takes advantage, it’s an early warning signal that something else is wrong.

What to Include in an Unlimited PTO Policy

The unlimited PTO policy doesn’t have to be overbearing or overwhelming.

It should include the following:

  1. Figure out what to call it. Some experts say unlimited PTO is the wrong phrase because it’s not unlimited. It’s not like you can take six months’ paid time off to move to a new house. Perhaps it’s something along the lines of flexible time off or a work/life balance policy.
  2. Tie to your core values. First, this only works if the CEO takes time off. If he or she doesn’t abide, no one else will. In our industry, it’s easy to tie performance to goals. If the person isn’t meeting their goals, they don’t get the benefit of unlimited paid time off.
  3. It’s a two-way street. This means your team must think about how their time off affects the rest of the organization. Do they need to appoint someone to fill in while they’re out? What can they do to prepare that person or people? Is it the busiest time of the year and someone wants time off? When you shift your culture, they begin to think about these things before asking.
  4. Clear guidelines. Just like we have the two rules, your guidelines should be very clear. You should tell them how to request time off—and be clear that just because they ask, doesn’t always mean it will be approved. It should also include how you’ll handle things such as disability, medical, or family leave. Typically those things don’t fall under unlimited PTO but would follow state and federal laws. Be clear and don’t leave people guessing.
  5. Butts in seats don’t matter. I’ve long been an advocate of a policy that allows for my team to take care of our clients and get their work done—from wherever and whenever they like. Of course, we have to keep normal business hours, but if they want to take client calls from the beach, so be it. An unlimited PTO policy shows people you’re more concerned about results than about their time in the office.

Do You Have Unlimited PTO?

Now it’s your turn.

Do you have unlimited PTO? What works and what doesn’t work?

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

  • Having client calls from the beach it’s fun, except when your computer sounds like it will take off. 😄

    • Howie Goldfarb

      Or that time we had a conference call with that big client and you were dancing at a club in Ibiza…..and whoa and behold the client loved house music and double their business with us…..

      • Debbie Johnson

        I really need to work with you and @corinamanea:disqus

      • Geez, Howie! No details, please! I have a reputation to maintain.

    • You need to buy a fan for your laptop!

  • paulakiger

    So. Many. Thoughts. Back later to share…..

  • Jen

    I’m freelancing now–so, totally on my own, which has its own ups and downs (as in, a lot of daily flexibility, but any time off is time that is unpaid).

    I’ve always had mixed feelings about unlimited PTO policies. People who have a strong drive/work ethic will tend to under-use their time off. It’s almost as if having unlimited causes them to use even *less* vacation time. Others…might push the boundaries. But yes–people should be able to take the time they need to deal with the crap that life throws at them without it counting against their vacation (suffice to say, I am familiar with that of which you speak… 😉 ).

    It all goes back to hiring good people and trusting them to make good decisions.

    • Howie Goldfarb

      I used to work from home in a sales job. 4-5 weeks a year I was at the factory. 3-4 days a month I would work at my larger sister company where a big VP resided. I always got more done in 4 hours at home than 8+ at the office. Productivity should be rewarded. And if you already are paying a flat rate for your estimate of X performance return (ROI) incentivizing with PTO is cheaper than a raise or a bonus because you already are paying a salary or total hourly sum/year.

    • That’s why we force it on people if they don’t take it. Because that absolutely will happen. It’s also why we have the ‘disconnected’ policy. You can tell (and now I can also see it with myself) when someone really needs to disconnect. They often can’t see it, but the rest of the team does. And everyone ALWAYS, ALWAYS comes back better.

      • Jen

        I love that people are forced to take time off! And, I still cannot believe I haven’t met you in person yet. That needs to be a goal of mine, I think…we are practically neighbors!

        • I am 100 percent in favor of this goal. Let’s figure out some Saturday or Sunday, I have no problem coming to you or meeting up some place halfway. Whatever you prefer. Maybe we could find a fun little hike or pretty walk to do?

          • Jen

            Yes! That sounds great! Halfway works well, and there are many pretty little walks/hikes in between.

    • Trust me, I have to force some people to take time off. And it’s a real fight. But it’s worth it when I hear, “You were right. I DID need time off. Thank you.” 🙂

  • Howie Goldfarb

    I think with a larger organization some of the cons can be hedged better. Like the work burden per employee gone gets amortized by employee numbers. The more people the less burden (on average vs reality) gets spread out. Also the bad egg thing of people taking advantage with a larger organization you can easily work out a math model minimizing that (yes a few will take advantage but not most and if you have 1000 workers if only 50-100 do it is less a burden than 2 out of 6).

    I think if you 1] are goal focused with rewards for attaining the goals and 2] have clear communication on the SOPs that keep the biz turning with proper delegation of responsibility (say all new client leads go to Employee X…they can’;t take off without formally delegating that process…..either in a stated plan or up to them to find coverage kind of thing) the boost in morale and trust should out weigh any negatives dramatically.

    • Yep. That’s what we do, but you’re right…it’s a lot harder to have more than one person out in a smaller team. That was not fun for me. 🙂

  • We just switched to unlimited PTO with a few rules. I’m really bad about taking time off anyway so now I don’t have a “use it or lose it” goal to work towards. Also, I don’t have the funds to travel anywhere so a staycation doesn’t thrill me. I have been taking days to volunteer and I’ll probably do some long weekends in the fall (my fave season). Even on vacation, it seems like staff is still connected.

    Here’s a story from a past regular vacation policy company. I had thyroid cancer surgery and it required I take a radiation pill. This meant I couldn’t be near anyone for a few days. Yet, one of the execs needed a PDF worked on urgently and I did during my treatment. Needless to say we parted company a few months later.

    • paulakiger

      Oh my goodness.

      • He had the balls to send me a LinkedIn invitation after I had left. Chuckle. Not. Oh yeah, during a group meeting, he threw an egg on the table near my friend which splattered all over her. Crazy place!

    • Stories like this make me wonder how human beings exist in a world with such selfishness. I do not understand it at all.

  • Debbie Johnson

    I’ve never worked for an organization with unlimited PTO, but it’s a benefit that interests me. I hate “use it or lose it” vacation policies. Some years, I would like to take more time off and other years less time off. It depends on what is going on in my life and if I have the funds for travel.

    I think the key to making it work is having clear cut rules and holding those accountable who abuse the rules. Nothing annoys me more than when companies punish everyone for the behavior of a few.

    And make good hires so you don’t have to worry about rule abuse in the first place.

    • Howie Goldfarb

      Some companies feel if you don’t take time off you will burn out or work less productively and employ the use it or lose it for that reason. I worked for a company that allowed vacation accrual up to 6 weeks before forcing you to take time off. They also allowed me to take pay in return for the time off at year end should I want.

      • Debbie Johnson

        That’s a good point.

        Do you think more companies will adopt unlimited PTO as a policy?

      • Jen

        Another reason for use-it-or-lose-it policies is that they exist on a company’s balance sheet as a cost/liability. If people were simply allowed to accrue days endlessly, it would become an accounting problem very, very quickly. That said, I wonder how unlimited time off works from an accounting perspective?

        • We track it (from an accounting perspective) to make sure no one abuses it. It also means people aren’t paid for unused time if they leave the organization, but that’s part of the deal they agree to when they come to work here. We also have different policies for disability, family, and medical leave. So we track for that purpose, too.

  • Dawn Buford

    It’s all about trusting your employees. We are lucky enough here at Spin Sucks to have a very professional team who work together seamlessly. That allows our CEO to trust that what needs to be done will be done and she can enjoy her 5,000 mile bike ride without feeling concern (or guilt). It works for us because we are adults, we are professionals, we care about our work and each other, and there are guidelines we follow to ensure fairness to everyone. I would call it flexible paid time off, because we all need time away to handle what life throws at us, and sometimes we just want to get away for a few days without worry.

    • Debbie Johnson

      It would motivate me to plan and be more productive so I could enjoy the benefit.

    • 5,000 miles might be a slight exaggeration. LOL!!

  • Dawn Malloy Buzynski

    Thank you for posting. I assume my query prompted this post?

    • Oh my gosh! Did you post about this, too? It seems to be a hot topic…I had a conversation about with someone in another FB group I’m in.

      I see now you put it in CA. That’s funny! So yes…you totally prompted this post. 🙂

      If you want to talk privately about it, let me know!

  • We’ve been doing unlimited PTO for about 7 years now, and I would totally echo the pros and cons here. Our biggest challenge is ensuring that people take enough time off, so we instituted mandatory vacation time as well. It’s all about respecting each other, and that’s a core value to us.

    • We don’t have mandatory time off (yet), but you can bet people know I”m serious when I call and say, “Your last vacation was a year ago.” And I’ve had to to that.

  • In almost all the instances where I’ve seen or heard of PTO being offered, the employees never take full advantage of it. It does require a lot of trust, but to Gini’s point, it can also require you to force your team to take time off! Increasingly, especially in a virtual work environment, I think building that trust, that sense of freedom, is invaluable in developing a dedicated, loyal and crazy engaged team. I know that in the short time I’ve been with AD and Spin Sucks, the support, encouragement and overall sense of loyalty and team spirit has been overwhelming. PTO isn’t a focal “why” behind that, but the whole package is one to be envied…

    Undeniably the best team I’ve ever worked with as a result. Except for Laura. She’s just ok 😉

  • paulakiger

    Okay,I said I’d come back after reading this early this morning and in the meantime many of my thoughts were expressed by others. I think the whole model of work, and leave time, etc. is transforming as the world moves to a more virtual environment and a situation in which our careers simply progress differently. I think in an environment with exceptional leadership, it can work GREAT. // Leave time was one of the biggest bones of contention at my previous job —- starting with having to take unpaid leave for maternity leave —– and subsequently even when that got changed, it was just always a sticking point and never one that seemed to have an elegant solution that was fair to everyone. // And now that I’m virtual/freelance, I do love the feeling of “freedom” (I can get up right now and leave for two days if I want to) but not so much the fact that 100% of the time I do that, I know I am giving up an income for that period of time (or scrambling to work from an unreliable hotel wi fi). // I think at the core of the question is — how do we live our work lives, while paying attention to the other parts of our lives (theoretically what we are working to have/provide) with some type of equilibrium. And what leaders will support that?

    • That’s exactly right, Paula. It completely depends on your professional goals, as they relate to what you want out of life. I tend to add benefits that I want myself (we have summer hours right now, for instance).

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