Unlimited paid time off (PTO), like unlimited brownies or all-you-can-eat bar food sounds like an amazing idea but in practice often yields unwanted consequences.
Did you eat your body weight in buffalo wings last night? I’m sure that was fun but I’d bet a kidney you’re not happy about it this morning. Does your employer offer unlimited PTO? Incredible, right?
Unlimited PTO has become a trend among big companies like Netflix, LinkedIn, Evernote, and GitHub. The premise is simple. Grind hard, complete all your work, and take as much paid vacation as you would like in return. On paper, this seems like a win-win for everyone but the reality, as with so many sparkling ideas, is that it’s too good to be true.
Why Unlimited PTO Backfires (And What to Do Instead)
If unlimited PTO were a solution for employee discontent, it would have long ago become the norm, not the exception. The issue is that offering employees endless access to paid leave is difficult to implement and, often, the consequences of doing so take a bigger toll on team morale than the benefits the practice provides. Here’s why:
1. There’s No Getting Around the Approval Process
Nobody (except, maybe, your spouse) will share their biggest fantasy but number two on everyone’s list is well known. We’d all like to work when we feel like it and only when we feel like but this won’t ever happen. It would be chaos if employees took PTO whenever they wanted which is why an approval process is needed. The problem is that not all requests will be green-lit.
Need tomorrow off because your dog is sick? Of course! Or… wait, wasn’t she sick last month, too?
Willing to work 60-hour weeks so you can spend December and January in Thailand? Let me get back to you on that…
Unlimited PTO is not truly unlimited because there are limits to when requests will be approved. This will disappoint some and yet relaxing the approval process will seem unfair to others.
Too many people working only in their personal interest destroys morale and a business without morale is a business that won’t be around for long.
2. Job Burnout is a Real Risk
While some will see unlimited PTO as an opportunity to live their best life, others will kick it into overdrive in an attempt to stand out.
Employees may look up to chronically overworked (or overworking) managers or higher-ups and assume that the only way they, too, can rise to these positions is to put in similarly long hours. When they see their colleagues “slacking” and taking excessive time off, some will double down in an attempt to gain attention. Inevitably, this leads to job burnout which, in turn, harms productivity.
Win-win? More like lose-lose.
3. Faltering Loyalty
Seniority is the traditional route to gaining increasing PTO and, frankly, it works. In exchange for years of dedicated service, senior employees enjoy more paid vacation than their junior counterparts. This incentivizes loyalty which, of course, is good for growth.
When PTO is no longer a function of time invested in a business, your best team members may grow disgruntled. Worse, when new talent has no reason to stick around, it likely won’t.
Unlimited PTO may, indeed, be too good to be true, but that doesn’t mean it’s an altogether bad idea. Project-based or results-based companies with non-hierarchical structures can benefit from the practice but even then implementation is delicate and not always successful.
The new push for unlimited PTO teaches us a lot about the present state of the job market but it is not necessarily the solution it is often claimed to be.
To learn more, don’t hesitate to book a call with me today!