This Is Why You Should Not Accept Unlimited PTO
Headline whiplash? It certainly feels that way lately. Hiring woes, massive layoffs, remote work, return to office — keeping track of the latest news can feel like a mental whirligig. But I was surprised to see unlimited paid time off (PTO) being debated on LinkedIn last week. I thought we had hashed this one out already.
I have long been an outspoken critic of unlimited PTO — yet it keeps popping up as something people see as attractive.
How many companies actually offer unlimited PTO? It seems to be popular in tech circles. But the 2022 edition of one of the longest-running reports related to employee benefits shared that 99 percent of U.S. employers offer paid leave — only six percent of those offer an unlimited policy. Another recent survey showed that unlimited leave ranked in the top 10 benefits that workers want most. It ranked above paid parental leave, tuition reimbursement, and diversity and inclusion community groups.
It is interesting to see the disconnect between how many companies actually offer unlimited PTO and how many people supposedly want it. I think there are a variety of explanations for the latter. After the instability and crises of the last few years, most of us see workplace flexibility as increasingly important. The idea that you can take as much time off as you want — as long as you fulfill your work duties — could be comforting to some. However, the subtext of an unlimited vacation policy is uncomfortable.
You can take as much time off as you want — but you decide what is the right amount (and your manager still needs to approve it).
I have yet to see an unlimited PTO policy work in practice. Aha! has a more traditional accrual policy where teammates can earn up to 200 hours of PTO annually. Everyone is encouraged to use that time in the way that is best for them — rest, recharge, rejuvenate. This is just an element of a comprehensive benefits package that includes profit-sharing, education stipends, retirement savings, parental and bereavement leave, and (of course) 100 percent remote work.
If you are looking for a new role or considering rolling out an unlimited policy at your organization, there are real issues that should give you pause. Here is why managers and individual contributors should never accept an unlimited PTO policy:
Company leaders shirk responsibility
An unlimited PTO policy mostly benefits the company. It is good for recruitment, if you believe the studies referenced earlier. But the most common praise you hear from the business side is that it reduces paperwork and administrative overhead. There are other cost savings too — underuse of the policy is often more common than overuse. At the core, unlimited PTO means leaders have just refused to establish a fair program and have just pushed it off to others. Keep reading.
Managers and teammates bear the burden
An unlimited PTO policy lacks clarity by default. Every person is left to navigate it on their own. Without a defined amount, how much PTO is enough becomes a constant negotiation between managers and teammates. Some managers will be more lenient than others in approving leave requests. More junior teammates may feel pressured to prove their status as meaningful contributors and feel uncomfortable taking advantage of the policy. Many managers in organizations with unlimited PTO despise the burden of this governing responsibility.
Everyone suffers from unfairness
An unlimited PTO policy is inherently unfair. A few people will take many days and most will only take a few. Folks also miss out on an earned benefit while they work for a company and again when they move on to a new opportunity. Since those in an unlimited PTO organization do not accrue any time, they are typically not paid out for that earned time if they leave the company. Some states in the U.S. have legislated PTO requirements, which makes an unlimited policy even murkier for an all-remote team.
Sustainable happiness is the goal. That means you need good work and good breaks.
There is one concept I see missing in all the headline whiplash. People want to do meaningful work and be respected by others for those contributions. Benefits matter and are obviously part of any candidate’s decision process. But the reason that people stay and grow at an organization is rooted in more than policies or perks. A business and the people in it are defined by collective accomplishment.
At Aha! we seek out intrinsically motivated people who love to learn and support others. We encourage everyone to achieve their best. Part of this means embracing what we call time-slicing — being able to step away for a few hours if needed, knowing a teammate will be there for you. And part of it means having the opportunity to take full days off without ever wondering how much is enough.
Ready to join a no-drama team of happy, productive experts? We are hiring.
