Businesses challenged with keeping Millennials motivated and Gen Xers in working families sane regularly experiment with new and different employee benefits. Some, like workplace flexibility and working remotely, have gained significant traction. Others, like foosball tables in break rooms, have yet to prove their value. And then there is unlimited paid time off (PTO), amazing on the surface but potentially difficult to manage.
The concept seems simple: Employees are allowed to take as much time off as needed without repercussion as long as the work gets done. Doing this builds employee loyalty and morale. It helps with recruiting and retaining great talent as you are treating employees like adults and holding them accountable for their outcomes rather than time spent in the office.
PTO combines an employee’s vacation time, sick days and other leave into one discretionary plan. Employers will typically not question the reason the employee is out of work. Unlimited PTO is designed to allow workers the flexibility to manage their work and personal lives.
Unlimited PTO seems to have the most traction in high-tech companies and startups. It is most often available to exempt employees and rarely to those working in retail, manufacturing and service industries. According to the Society for Human Resource Management, only one percent of American workplaces in 2014 reported offering this benefit. Yet, it generates much interest, and more companies are considering it.
What to Keep in Mind
So, what are the benefits, and what do you need to watch out for in the world of unlimited PTO?
• Without guidelines on the amount of time off that is acceptable, some companies report having a hard time getting employees to actually take time off. People like to know what is expected of them, and it is up to employers to give some direction.