Should You Offer Your Employees Unlimited PTO?

bigstock Day Off Calendar Displays Work 65869336 300x273 - Should You Offer Your Employees Unlimited PTO?It’s no secret that America’s workers are busy. Between family obligations (like sick kids or ailing parents) and necessary errands (like annual physicals and renewing driver’s licenses at the DMV), few can dedicate paid days off to real vacation time. Fortunately, some companies have found a way to remedy this situation. They call their solution “unlimited PTO,” and it combines paid sick days and personal/vacation days under one “paid time off” umbrella for employees to utilize at their own discretion.

So far, these vacation-generous employers are few. According to the Society for Human Resource Management (SHRM), less than 1 percent of U.S. employers currently offer unlimited PTO. While many are small start-ups, the policies are gaining popularity among larger employers as well. Recent companies with unlimited PTO policies mentioned in the news include Best Buy, Motley Fool and Netflix. The SHRM reports that another 2 percent of organizations are considering adding an unlimited PTO benefit within the next year. Should you join them? Consider the following pros and cons.

Pro: Fresher, energized employees.

Unlimited PTO policies allow workers to take time off when they need it. Whether they’re coming down with a cold or could just benefit from a “mental health” day, a small break enables them to renew and recharge. You’ll have more employees working consistently at 100 percent rather than plodding along, suffering from burnout out.

Pro: Reduced administrative work.

PTO policies require employees to use paid time off “within reason” while giving them the freedom to take time away from the office at their discretion. This means you (or your HR department) no longer have to track days off against vacation and sick time balances. You also won’t have to “pay out” unused time when an employee moves on.

Pro: More attractive benefits package.

Today’s workers value flexibility, making unlimited PTO an extremely attractive benefit in the eyes of potential hires. But there’s more: not only may offering unlimited PTO help you recruit the best new workers, it will also increase current employee loyalty. This means less costly turnover.

Con: Potential for unequal opportunity.

You obviously cannot allow everyone in your company to take time off at the same time. But making sure every worker has an equal opportunity to use PTO can be difficult. Even the best managers may find it impossible to coordinate a fair and effective schedule.

Con: Not all jobs work with unlimited PTO.

Some jobs require workers to be present, making unlimited PTO difficult to implement. This can lead to resentment between employees or departments where one’s job works well within the policy paradigm and the other’s does not. Unlimited PTO may also not work well within an industry that is unionized or at large organizations with hundreds of nonexempt hourly workers.

If you’d like to explore using unlimited PTO—or another new benefit—to enhance your company’s employee benefits package, we can help. Contact us today to learn more about the latest popular options.