One of the things almost everyone looks forward to is a vacation — or some time off work, at least. After all, numerous studies have been conducted before and it’s been proven that (according to Dr. Jessica de Bloom — a Psychology Professor) vacations are beneficial for employees’ mental and physical health. That’s why since the subject of unlimited PTO (or unlimited paid time off) has been brought up, more and more companies began offering it as one of their incentives.
But will it help their workforce become more productive employees?
The Pros and Cons of Unlimited PTO
Currently, there are different types of laws in the US that regulate (or don’t) paid and unpaid time off for their employees. California, for instance, has the California Family Rights Act (CFRA) and it offers eligible employees to have up to 12 weeks of unpaid leaves. When it comes to paid sick leaves, however, the state mandates that employers must allow their employees to have 1-3 days of paid sick leaves.
In New York, companies with less than $1 million net income must give their employees up to 40 hours of unpaid leave every year. Businesses with 5-99 staff members must provide their workforce with up to 40 hours of paid sick leaves; corporations with more than 100 employees must give their employees up to 56 hours of paid sick leaves.
Now that the unlimited PTO policy is in the talks, many are left wondering if paid and unpaid leaves are beneficial or crucial to a business.
Pros
Businesses can save more money.
An unlimited PTO policy can sound like a nightmare to some business owners. However, if a company implements an unlimited PTO policy, employers won’t have the obligation to pay for the number of vacation hours their worker earns. Additionally, this also eliminates the need for companies to pay their employees for the minimum number of hours or vacation days that the laborer didn’t use.
Companies can recruit more people to work for them.
Most companies now also have PTOs as part of their perks — and it’s one offer that can get people to want to work for them. But an unlimited PTO policy may just give a business a slight edge. According to a survey by MetLife, 72% of employees are interested in having unlimited PTO as one of their company’s incentives.
PTOs might be easier to implement.
Whether an employee acquired an illness or they simply just wanted to go to the beach, they have various reasons as to why they need some time off work — and keeping track of these reasons can be difficult for the HR department. With unlimited PTO, however, this dilemma can possibly be eliminated — as there won’t be as much paperwork to take care of. While there should still be a system that monitors an employee’s PTO, adding and subtracting their earned vacation hours will be kept to a minimum.
Employees can enjoy a better work-life balance.
Job burnout is a common occurrence among almost anyone who works at some point. According to a Gallup-Workhuman report, 25% of workers felt burnt out from work “very often.” That’s also why PTOs are always sought after by employees — so they can catch a “break” from their stressors (aka their job). And with an unlimited PTO incentive potentially becoming a prerequisite in the future, employees can possibly achieve a better work-life balance as they no longer have to work for their vacation hours — because it will be handed out to them as a part of their company’s benefits; but ONLY if unlimited PTO becomes a prerequisite or if a company decides that it be one for their employees.
Cons
Companies might have a hard time keeping track of their employees’ PTOs.
Unlimited PTO may be easier to implement, but bigger companies may have difficulty keeping track of their employees’ PTOs. Unlike FMLA (Family and Medical Leave Act), Flexible Time Off policies are still relatively new — and it hasn’t been mandated on a federal level yet. Therefore, until there is a nationwide fixed system that companies will have to follow, their HR department will have to manually track each employee’s Paid Time Off.
Work can become more stressful for some employees.
Vacation days are something most employees look forward to. But unlike the traditional PTO policy, vacation hours in unlimited PTO aren’t “earned” through hard work. Therefore, this can put pressure on the employees whenever they’re informed that they don’t have any more hours or days off left. There’s also the stigma that employees who take too many days off work are sometimes seen as “lazy” and “unmotivated.” Furthermore, Insider found that 42% of Americans who “use” their unlimited PTO incentive don’t exactly go on actual vacations — as they still sign in to their work email.
It may not be for every worker.
As stated, unlimited PTOs, just like other flexible time off policies, are still new — and for veteran employees, this type of work culture can be difficult to grasp as they’re used to working (and sometimes, working extra hard) in order to earn their vacation hours. If unlimited PTOs become the norm, this can potentially demotivate employees to work any harder than they’re asked to. Moreover, if unlimited PTO is given to everybody as a company perk, it will stop becoming a “perk” and start becoming an expectation — when this happens, employees will stop working for their vacation hours and they will have one less goal to try achieving.
The workforce may start resenting each other.
Besides veteran employees possibly seeing their colleagues as “lazy” for not “earning” their vacation hours, another potential drawback of implementing unlimited PTO on employees is they can take the vacation time that they have and delegate their workload to their coworkers instead — this circles back to the “job burnout” problem that might arise when other employees are delegated tasks that were initially the vacationing employee’s responsibility. Because not only will they be prone to stress and exhaustion from working, they can potentially abhor their colleague who is enjoying their PTO.
Summary
Implementing an unlimited PTO incentive is as appealing as it sounds — as businesses can save money and employees can enjoy a fixed number of days without having to work hard to earn it. However, like most workplace policies, it also comes with its potential drawbacks. Business owners will have to come up with their own system to keep track of their employees’ vacation days and older employees may not be very welcoming of the “work hard, play hard” change in work culture.
