Why your company's unlimited PTO isn't working (and how to fix it)

Fear of the monster workload awaiting them when they return to work or even shame about leaving it all behind stops many employees from taking time off. More than half of workers with paid vacation days don't use them all. Compared to our counterparts around the developed world, Americans work longer hours, which is bad for mental and physical health.

To attract and retain workers in this very competitive market, more employers are offering unlimited PTO (paid time off), but the plan has led to unexpected consequences for some companies. While taking off when you want to sounds like a sweet benefit, reality paints a different picture.

We've got some answers on why some unlimited PTO plans fall short and how employers can avoid that fate.

What is unlimited PTO?

Unlimited PTO doesn't mean skipping work anytime you don't want to go. People are hired to do a job and they're expected to deliver during work hours. What unlimited PTO does mean, when used correctly, is a chance for companies to increase productivity. When done right, it empowers employees to take the time they need to function, take care of their personal needs, and not get burned out on the hamster wheel of life. And our research shows that employee reviews on Glassdoor mentioning "unlimited" policies are up 75% since 2019, with 88% speaking favorably of unlimited PTO programs, showing the growing interest in them. 

Dangers and pitfalls of unlimited PTO

If you don't develop an environment where leaders and managers set the right tone, your plan won't work. In fact, it can backfire, with workers taking less time off under an unlimited plan than an earned plan. If that is the case with your company,  you might need to take a closer look at your company culture. It can even create resentment among employees if some workers take more time off than others. 

The challenges with unlimited PTO plans are often cultural. Americans are used to "earning" vacation, so many people feel they "deserve" time off only when it's in a  structured system. It's hard to shift your mindset and your company culture to an unlimited PTO plan if you aren't used to it.

Further, workers accustomed to "earned" time off plans are familiar with being paid out for unused time when they leave a job. This can be especially true if you are in an industry with high rates of turnover like tech, professional services, education, or telecom. But that goes away under unlimited PTO. 

The goal is to retain workers, not have them thinking about what they'll get when they leave. To do that, you've got to fix the culture, tout the benefits of the plan, and walk the talk from the top down.

Keys to a successful unlimited PTO program

It's no good to have an unlimited amount of paid time off if you feel guilty about taking it because other teammates or leaders never take time off.  To address this, develop guidelines so employees know how to take advantage of the plan in a way that works for them, their department, and the company.

Here's advice from employees to their peers on using unlimited PTO:

Your leaders may also need training on how to use unlimited PTO. Then, they can model work/life balance and encourage others to do the same. Training should include coaching managers to proactively manage workload so teams can plan ahead, avoid fire drills, and workers can take time off with less pressure. 

Here's how unlimited PTO can give everyone some of their time back:

• Rest and recovery: If employees are sick, hurt, or experience a loss, they can take the time they need to deal with challenges and return to work refreshed. No more "earning" sick days or working while sick because they haven't earned the time off yet.
• Mental health days: Remember as a kid when you exaggerated being sick because you didn't want to go to school? That was your way of saying you needed a mental health day. Some days, employees just can't face dealing with work, and that's okay. No need to "Ferris Bueller" sick days when they need a break from work.
• More vacation, more often: A recent poll of Fishbowl users, found that most (54%) professionals on the platform are unable to or do not believe they can fully unplug while on PTO. Instead of saving up their blocks of time for one big vacation a year, employees can consider taking several mini-vacations. Spending more time doing things they love can make it easier to come back to work. It can help minimize anxiety when they return, knowing it isn't going to be another full year before they get more time off.

You have to trust your employees to make unlimited PTO successful and desirable. When you truly empower employees to take better care of themselves, remove "earnings" and "punishments" for taking time off,  and model the behavior from the top down, you'll set the tone for a happier, more productive workforce.