Explained: The Pros And Cons Of Unlimited PTO

The trend of companies – especially tech companies – offering unlimited Paid Time Off (PTO), has really taken off in the past few years. As a business owner, you must be wondering what the whole deal is about.

Does it help keep your employees happy? Does it negatively impact performance? Is unlimited PTO really worth it?

Let’s find out.

The Pros

Allows Your Employees to Rest and Unwind

The original aim behind giving your employees vacations or Paid Time Offs is to help them strike a better balance between their work and life. The usual PTOs often go unused due to a lack of convenience, resulting in burned-out employees.

An unlimited PTO program can encourage chronic over workers to take some time off for recreation and return to work rejuvenated.

Can Lead to Savings

In the traditional PTO policy, unused vacation days at the end of every year keep accruing. When that employee leaves your company or retires, you are mandated to reimburse them for all those unused PTO days.

On the other hand, an unlimited PTO program has no such fixed number of days. Furthermore, a lot of administrative work is reduced as you no longer have to keep track of used holidays either.

Helps Attract Talent

A significant advantage of implementing an unlimited PTO policy at your company is that it helps you attract and acquire new talent. While the trend is catching on, the actual number of companies offering this perk is still limited.

Offering unlimited PTO can entice young professionals into choosing your company, as well as help in retaining them.

The Cons

Easy to Abuse

The entire framework behind unlimited PTO is based on trust. Should an employee want to do so, it is quite easy to take advantage of this perk to take unnecessary holidays every second day.

Some employees can disappear for months at a time, secure in the knowledge that they cannot be fired as they have not exceeded any fixed PTO quota.

Can Cause Stress to Employees

A major disadvantage of removing any predefined vacation days is that it can make it hard for employees to understand where to draw the line. Fellow employees often judge their peers for taking more PTO, which can pressurize people into taking fewer days off than they would have taken otherwise.

Trying to meet vague expectations can cause far more stress than unlimited PTO alleviates.

Vacations Might Overlap

The biggest reason why most companies are still refraining from offering unlimited PTO is that it can become a logistical nightmare. In the absence of clear cut vacation days, a large fraction of your workforce can end up taking days off simultaneously, especially around major festivals.

This can cripple your work during a crucial period.

Conclusion

There is no one size fits all answer. Depending on your work culture and employee needs, unlimited PTO may or may not be good for your company.

For a business with trustworthy and hard-working employees, unlimited PTO is undeniably a great benefit. Not only does it boost the morale of your workforce, but in the long term also leads to cost savings for your company.

But if your line of work is not that digital in nature, you may find that frequent vacations have a detrimental impact on your functioning. Moreover, this kind of system is quite easy to take advantage of, which can be a problem if a section of your employees is not that reliable in nature.

So is unlimited PTO good for your business and your employees? That’s for you to decide.