Unlimited PTO in the Modern Workplace
Unlimited paid time off is an increasingly popular perk to offer employees, especially at startups and tech companies. Fans of flexible PTO policies cite improved work-life balance and reduced financial liability for unused PTO payouts. Critics point to downsides like potential for abuse and implementation difficulties.
While this type of policy isn’t for everyone, Pliancy has embraced the benefits of unlimited PTO since our founding. We trust all our employees to be responsible for their own time from day one, and we encourage colleagues to take a generous amount of time away from work to recharge.
This post spotlights three Pliancy perspectives on why we believe that an unlimited PTO policy is the best choice for our team members and for our business.
Why Paid Time Off Is Good for Business
Rachel Noiseux, People Programs Manager
In July 1910, President William Howard Taft told a crowd that “two or three months’ vacation [...] are necessary in order to enable one to continue [their] work.” Though he never formally proposed legislation to make this a reality, it’s clear that President Taft recognized the transformative power of rest.
It appears Taft was ahead of his time. Today there is a growing movement to offer employees the flexibility and independence to make decisions about when, where, and how they work. This also involves granting employees the flexibility to make decisions about when they don’t work.
The messaging behind hustle culture is that if you’re not working, you’re being lazy; that the only way to get ahead is through the relentless, all-consuming pursuit of success. As a result, even when people do take vacation or sick days, there is often still an expectation to remain available and connected to the workplace.
The Business Case for Unlimited PTO
It’s time for the modern workplace to champion rest. There are plentiful reasons, many rooted in empathy, why a robust PTO plan is good for employees. But there are plenty of business reasons to champion rest, too.
I’m sure we’re all familiar with the feeling of running on fumes on a Friday after a tough week. On days like that, your routine work could take you twice as long because you’re unable to focus, or you may lack the mental energy to start a new task. If you have a scarcity mindset, you may think this feeling isn’t a good enough reason to take time off.
Many studies have shown that productivity increases when workers are given the space to disconnect from work. Even people who love what they do can benefit from taking time away to recover from everyday stressors. The logic here is simple: when we are rested, we can accomplish more.
Closely tied to productivity, creativity is also shown to increase when returning to the office. Time off allows the brain to recharge, and new stimuli seen and experienced during PTO may also inspire unexpected solutions.
This principle even applies on a smaller scale. Taking a few hours to clear your head or go to your kid’s soccer game can help you return, clear-eyed, to the issue at hand. We do not exist solely in the silo of our work: stepping away provides space to ideate and inspire new approaches.
3. Loyalty & Retention
Employment trends have shown that workers are looking for flexible work arrangements and, by extension, for companies that value autonomy over a strict 9-to-5 mentality. These arrangements require mutual trust. Employees must trust that their employers are sincere in their policy design (e.g. unlimited PTO will not be restricted due to unspoken rules). Employers must trust their employees to build their schedules responsibly and thoughtfully.
This flexibility pays dividends in loyalty, and our retention rate is higher than our competitors’. Fostering a community of loyal employees reduces turnover costs and provides the opportunity to invest in upskilling and long-term success.
Empowerment Through Autonomy
When all is said and done, flexible work arrangements and PTO are not about keeping a balance sheet where every single minute of the 8-hour day needs to be accounted for. That’s just micromanagement, and we know we have better things to do than watch each other like hawks. Instead, we believe in giving power back to the people so everyone can create the work-life integration that suits them best.
Employees are the ones who have relationships with clients, make the products, balance the finances, hire staff, and much more. They are the ones who truly create impact within an organization. As long as employers show staff the respect they deserve, people’s individual work will thrive, our personal lives will thrive, and the business will thrive, too.
Unlimited PTO at Pliancy
Tiffany Kress, People Programs Generalist
I know what it’s like to have to structure your personal life around the constraints dictated by your employer. I’ve experienced the full spectrum of PTO: making do with 10 days annually; accrual that scales with tenure; and unlimited PTO here at Pliancy.
Is unlimited PTO a scam? Unfortunately, the answer depends on where you work. A successful unlimited PTO policy is rooted in a company’s culture. Unspoken rules can have a huge impact on employee behavior.
The Limits of “Unlimited” PTO
In an organization where any time off (not just vacation) is treated as an inconvenience, “unlimited” is hardly an accurate descriptor. If people are afraid they’ll be judged or penalized for being out of the office, they’ll take less time off—regardless of what the company’s official vacation policy says.
A 2018 survey by HR company Namely found that employees at companies with unlimited PTO policies took an average of 13 days off per year. (That’s two fewer days than employees with traditional PTO plans!) Imagine having only one day per month to deal with illness, family obligations, caretaking responsibilities, medical appointments, weddings, graduations, and to recharge personally and professionally. It’s simply not enough.
On my first day, it was clearly stated to me that Pliancy employees are encouraged and expected to take four to six weeks of time off each year. I now have the pleasure of being the person who gets to share this guideline with our new hires. There’s always a look of disbelief, and it’s a joy to confirm that yes, we really mean four to six weeks each year.
In early 2022, we took things one step further: we created a Slack channel called “Wish You Were Here” where team members can share photos and videos from their time off. Whether it’s a beachfront dinner in Hawaii, a staycation in the neighborhood, a backpacking trip with coworkers, or a European honeymoon, it shows that disconnecting is not something we need to do in private. Instead, rest is a necessary part of life. Making space to celebrate these memories reinforces our time off policy in a concrete way, especially when leadership and managers lead by example.
Unlimited Vacation vs. Unlimited PTO
Some use “unlimited vacation” interchangeably with “unlimited PTO,” which in itself shows that people often forget there are many reasons someone may need to be out of the office. Bereavement leave is accompanied by its own stressors. Religious holidays are not always celebrations. Sick time, whether for illness or for preventative appointments, is not a vacation.
In recognition of this, I suggested creating new categories for time-off requests. Employees can now select from these options:
- Jury Duty
- Parental Leave
- Sick Leave
We respect that each team member leads a full life outside of Pliancy. We also believe that disconnecting is integral to doing good work. We celebrate rest and its power to improve our physical, emotional, and mental well-being.
Using Time-Off Data to Avoid Burnout
Zach Brak, Lead Analytics Engineer
US employers are not required to provide any paid vacation time, and I think we’re all familiar with how this stark contrast has impacted American work culture. According to a 2017 study commissioned by Glassdoor, the average US employee with access to paid time off reported using only about half (54%) of their available time. With a “rise and grind” mindset, time off seems like an indulgence: a luxury, rather than a right.
What happens when hustle culture pushes us too hard? A recent American Psychological Association survey found that 79% of participants had experienced work-related stress within the past month, and almost 3 in 5 participants reported symptoms of burnout such as emotional exhaustion, cognitive weariness, and physical fatigue.
The Importance of Restful Time Off
If burnout is the disease, then time off is the medicine. But how do we get better at diagnosing burnout? How do we know when to prescribe PTO, and how do we find the right dosage?
We have one part of the equation, which is that not all PTO is created equal. And not all vacation is created equal, either: a trip to visit family isn’t necessarily the same as relaxing on a beach alone. Analyzing PTO usage by category can help us keep tabs on how much restful time off our team members are getting, which is critical to alleviating work-related stress.
Pliancy offers 13 paid holidays throughout the year and we encourage four to six weeks of time off annually. Even at our minimum suggestion of four weeks (20 days), this is about 12.6% of the working year. Put more simply, it’s approximately one vacation day per 10 working days, or the equivalent of taking every other Friday off.
Imagine how taking every other Friday off could impact your mental health. You could run errands and save the weekend for relaxing. You could take a short trip away to recharge. No matter what you use the time for, breaks like these can help all of us bounce back from the pressures of everyday life.
Leveraging Data to Protect Our Teammates
Our goal is to track PTO utilization through rolling 3-, 6-, and 12-month periods. We can identify when employees fall below this ~10% PTO rate, check in with regard to wellness, and encourage them to take time for themselves.
As Pliancy improves its data collection and builds larger data sets with reliable correlation values, we hope to catch warning signs as early as possible. We continue to brainstorm additional ways we can gauge employee burnout risk through surveys, manager check-ins, workload monitoring, and more. Our aim is to encourage team members to take time to recharge before they reach a breaking point.
This may help with retention, sure—and loyalty, and productivity, and any number of other intangibles. But at the end of the day, it’s not strictly a business pursuit. If public policies and social programs are not going to support individuals in the way they need to be supported, it’s our responsibility to come together as a collective and do it for ourselves.