Paid time off is an age-old incentive companies have used to help their staff maintain a healthy balance in their work and personal lives. 

Traditionally, a new hire enters the workforce given a set amount of days they need to take off in the year.

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But times, they are a-changing…

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Unlimited PTO is today’s topic, and it’s a powerful tool for modern companies who want to get the most out of their employees.

Let’s do this thing!

What exactly does “unlimited PTO” mean?

All right, let’s quickly start with the acronym P.T.O itself. It stands for “paid time off.” Unlimited suggests there is indeed no limit to the maximum amount of paid days off they can take.

Don’t worry, it doesn’t mean you pay your staff for doing nothing, it just basically means that new starters in the company don’t begin the year with a set number of paid days off to take. They just request paid days off from you, their manager, and you use your discretion to approve or deny the request.

It might sound a little strange at first, but it can be a really attractive employee benefit when properly utilized. 72% of employees in this survey stated unlimited PTO as their number-one most valued employee benefit. That definitely brings some employee satisfaction and engagement.

Paid time off systems of course differ from company to company, and also from country to country, or even between continents. 36% of American employees have only 10 or fewer days of PTO each year, and 86% of them wish they had more PTO available. 

How to implement a PTO program

No big workplace change ever came without risks. It’s certainly true that unlimited PTO differs heavily from traditional time-off systems. 

Follow these principles closely if you’re bringing unlimited PTO into your workplace:

Draft up the system:

The first thing you need to do is create a rough draft of the system and conceptualize it in your workplace. Unlimited PTO is not an easy system to create. You have to exercise caution when reviewing the ins-and-outs of your current time-off system. Then work from there.

Be conscious of staff in the same department taking time off at the same time. This is especially important for SMEs (small and medium-sized enterprises) where staff often have to work cross-departmentally. If one member of staff plays a more critical role than another, for example, you’ve got to be very cautious when approving simultaneous PTO.

Use your HR department’s knowledge and filing system to make sure this first step is realistic for your company. Make the most of their expertise. There’s nothing worse than a lack of planning for a system like unlimited PTO. One day you make an approval, and the following day you’re juggling three roles at work like a one-man-orchestra. Utilize your HR department to create a solid draft.

Establish the approval process:

Once you’ve outlined and conceptualized your unlimited PTO process, get down to the nitty-gritty of the approval criteria for PTO requests. Create separate filing systems for the request process and approval process. 

Unlimited PTO is a powerful system when utilized properly, but without proper consideration, there could be conflicts of interest for staff who want to use it. Just because it’s called “unlimited time off” doesn’t mean there aren’t any constrictions. 

Approval criteria need to be displayed in a crystal-clear way for all of your workers. Unlimited PTO is a modern practice that uses new trust systems to stop someone from abusing it. By keeping approval criteria hyper-clear, it’s less likely anyone will be confused as you bring the system in.

Create communication policies:

So once your new unlimited PTO system is drafted up, and you’ve created clear guidelines for approval, it will benefit you to review your communication policies. A dedicated communication channel for requesting PTO can be a game-changer. 

Once again you can utilize your HR staff to help with this. These days, it’s possible to have a user-friendly dedicated HR app. When making a PTO request, a dedicated HR app can cut out so much hassle. You could outsource a company to develop a dedicated work application with a powerful PTO system.

Make sure communication is kept as top priority for your unlimited PTO system so that things like absences and responsibilities are understood beforehand. Consider implementing new communication policies to ensure that your unlimited PTO take-off goes as smoothly as possible. You can do it!

Guide staff through time-off durations:

Time-off durations are extremely important to business. Create a maximum of say 1-2 weeks for PTO requests. You might need to pay special consideration to your busier weeks and months in the year.

It sounds basic, but here you can even try leading by example. Use the PTO system openly and stick to the duration exactly. If you do so, don’t take your PTO at a make-or-break time. Time off is crucial for employee work-life balance, so make sure you’re taking the appropriate amount of time off, and be clear when you do so. You’re actually illustrating how useful PTO is and preventing future abuse of the system. 

If you’re using a dedicated HR time-off application system, general guidelines should be available for everyone to reference. Unlimited PTO is a modern business practice so sometimes there might be deviations from the guidelines. Just make sure there are outlined guideline principles to follow.

Set minimum time off:

So if all of your communication policies and channels are ready to be rolled out, the next step is being clear about the minimum time off staff need. There are some arguments to suggest that minimum time off is equally as important as maximum time off.

Believe it or not, more than 40% of US employees don’t take all their paid time off. This can lead to deep problems for the business down the road. Research like this begins to show some complexities that already exist in PTO systems.

Some people might not take all of their allocated time off as they feel they don’t necessarily need it. Around half of people who don’t use all of their PTO state this as the main reason. Others state that they might fall behind their deadlines, or don’t take it because they feel bad for their coworkers taking on their extra tasks.

Using minimum time off creates a healthier work-life balance. Make sure your staff are using theirs.

Prepare for any discrepancies:

Now you’ve pretty much prepared for every step leading up to your staff using an unlimited PTO system. Now’s the time to prepare for any future discrepancies in the system. A giant change like an unlimited PTO system can lead to discrepancies if you aren’t eagle-eyed once it’s implemented. 

One example could be discrepancies between unlimited PTO for hourly workers vs salaried workers. PTO might be more difficult to give to hourly workers. There are some suggestions that state that workers won’t use time off for fear of losing a competitive edge over someone who does use PTO. This is a dangerous breeding ground for burnout and workplace conflict.

One way or another, you might need to prepare for potential discrepancies or conflicts. It certainly is better to be safe than sorry, so before you roll your unlimited PTO system out, double and triple-check every corner of the system.

Check for compliance:

Our final principle for a strong and healthy unlimited PTO system is to make sure you check for compliance. All other principles are used to consider the “before and during” times of unlimited PTO, so this last one asks you to consider the system moving forward.

As we mentioned, allocated paid time off should be used by all employees so that they don’t risk burning out or disrupting their work-life balance. You can use an unlimited PTO system (complete with minimum time-off allocation) in a compulsory way so that all staff must comply with your rules.

Set up a clear system that lets you check PTO usage after it is used. You obviously shouldn’t punish someone who doesn’t use all of their PTO, but just make sure you advocate and promote them taking it. It might work wonders for them if they recognize their manager is looking out for their personal life and well-being. Don’t overlook this. 

One extra suggestion is to make sure you and the company executives deeply understand applicable work laws in your area. Holiday laws can vary between US states, and also between European countries. Your remote and hybrid workers might benefit from an unlimited PTO system too, so consider how they fit in with the company vision.

There we have 7 general principles that should cover all bases if you’re setting up an unlimited PTO system. Now let’s get into some of the pros and cons you can expect if you do implement unlimited PTO.

Potential pros and cons for your unlimited PTO system

On first reading “unlimited paid time off” you might have a fair few questions to ask. Unlimited money given to staff while they take a day off? Preposterous!

However, a healthy unlimited PTO system provides the groundwork for an extrinsic reward system. It empowers staff with a new way to balance their work and personal lives and creates room for personal planning. Outlined here are some of the biggest pros, followed by some cons to watch out for:

Pros of an unlimited PTO system:

• Removes the “Christmas rush”: People most often take their paid vacation around December time. Traditional time-off policies mean there’s a general air of rushed panic in December as everyone pushes to get their vacation in for Christmas time. Unlimited PTO helps people spread holidays out.

• Attract new talent and retention: Unlimited PTO is a powerful tool to acquire new talent and keep them at your company. 88% of respondents in a Glassdoor survey listed it as a massive pro. You’ll be bringing up industry-leading stars to your company, and unlimited PTO is attractive enough to keep them there.

• Saves money: When a company has employees who haven’t used all of their paid time off, they’re usually forced to pay it out, which can have knock-on effects on daily operations. You won’t be obliged to pay out unused holidays with an unlimited PTO system.

• Combats burnout: No doubt about it, HR professionals know that a good unlimited PTO system improves engagement and reduces burnout across all departments. It shows new trust in staff and they feel more valued, leading to improved morale and company culture.

• Improved flexibility: Here’s a great bonus. Employees feel more freedom and autonomy from being part of an unlimited PTO system. Many employees have massive pressures in their personal lives like children and aging parents. A lot of international staff might also want personal holidays for their own cultural reasons too.

• Shows confidence in your employees: This one’s certainly true. An unlimited PTO system is likely to inject a boost in employee morale. When people are able to make more of their own choices, they simply feel a greater sense of responsibility. Having unlimited PTO works wonders for your employee benefits package.

• May save HR time: After a certain amount of time has passed, and your PTO system is rock-solid, some pressure is taken off your HR department. Human Resources generally have a lot of tasks to begin with. With a solid PTO system, and especially with a dedicated piece of software, HR no longer needs to spend as much time and energy on holiday delegation.

• Increase productivity: Overall, workers with a good work-life balance perform better at work. When staff can take holiday as and when they need it, they’re much more likely to return to work recharged and well-rested. Their relationships with their colleagues and superiors become more positive and the stage can be set for a more positive work atmosphere.

Risks to keep an eye on:

• Lines between sick leave and unlimited PTO can blur: This is a basic risk, but naturally, when a new system like unlimited PTO comes in, there can be some confusion and potential miscommunication. When staff are off from being ill, they generally need health reports to show that. Keep this in mind.

• Hourly employees might object: Another risk worth careful consideration is the fact that hourly employees usually aren’t eligible for unlimited PTO. Their work and salary are bound to clock-in, and clock-out times, so you might want to consider developing something to keep your hourly staff happy. 

• A tumultuous changeover period: One thing is for sure, changing from a traditional time-off system to unlimited PTO takes careful planning. Unlimited PTO has been used by some corporate giants for a few years, and they generally have enough cash and support to fall back on if anything goes wrong. Recent developments show SMEs are now adopting unlimited PTO too. Just be careful of your resources switching over.

• Employees might not use their unlimited PTO: As we highlighted earlier, there might still be a few reasons some staff may choose not to make the most of unlimited PTO. There are a whole host of reasons, and you might need to show extra encouragement to keep the system fair. Here is a good time to lead by example for them.

• Potential for confusion: An unlimited PTO system takes careful dedication and planning. Without meticulous attention to detail, you’re running the risk of creating guidelines and rules that might confuse some team members, especially more senior workers who aren’t used to this new system. Prepare well.

Unlimited PTO is a great incentive. So is a teambuilding retreat!

If you’re in the business of enhancing your teams through new systems of paid time-off, you really shouldn’t overlook the power of team-building retreats too! 

Young employees entering the workforce see unlimited PTO as an attractive work incentive. They also see corporate travel and teambuilding retreats the same way! A twice-annual retreat for your teams provides an unforgettable experience that truly stands out. 

Here at Surf Office, organizing team retreats is what we do best.  

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Here’s what we offer:

• Stress-free transfers? We got you! ✅
• Quality-assured accommodations? Check! ✅
• Engaging team-building activities? Our speciality ✅
• Restaurant reservations? That's on us! ✅
• Expert retreat planning assistance? Of course, we have this covered! ✅
• Onsite support, tailored to your needs? Absolutely ✅

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Not only this but we also have access to 160+ locations around Europe, APAC, the US, Latin America, and now Africa, meaning the sky is your limit when it comes to choosing the right location for you and your team.

Unlimited PTO is a great tool for boosting morale among your teams. Let them know you’re a manager who likes to go the extra mile and bring them on a teambuilding retreat. You can even organize a remote team retreat through us too!

Let us sort out the tricky logistics for you. Spaces are very limited, so get in touch now!