Pulse Check: Unlimited PTO Least Preferred Flexible Work Arrangement

Already growing in popularity, the pandemic rapidly accelerated the demand for flexible work arrangements. One survey of 1,500 hiring managers found 62% of companies plan to continue offering remote work opportunities because of their experiences during the COVID-19 pandemic.

Employees are just as eager to keep flexible work arrangements. One study found that 59% of workers would only consider a new job if it gave them the option to work from any location. Wellable’s most recent pulse check confirms this sentiment is alive and well. When asked to choose which flexible work arrangement they value the most, almost 40% of respondents picked teleworking or remote working over shortened work weeks (28%), flexible start and end times (23%), and unlimited paid time off (10%). Clearly, when it comes to workplace flexibility, employees value being able to work from where they want above all else.

Despite the popularity of remote work arrangements among employees, it isn’t always a viable option from the employer’s perspective. Though many plan to offer remote work going forward, concerns over its impact on innovation, productivity, and culture have led some employers to provide alternative forms of flexibility.

Now offered by one-fifth of employers, unlimited paid time off (PTO) has become increasingly popular as an alternative to working remotely, or as a supplement if an employer offers a hybrid model. One of the main benefits of remote work is that it enables employees to tend to a range of needs (e.g., mental health, caregiving, doctors’ appointments, etc.) without having to use sick days or unpaid time off. Since unlimited PTO allows workers to take as much time off as they need, it serves at least some of the same needs as remote work does without raising the same organizational concerns.

Given that only 10% of respondents placed the highest value on unlimited PTO, employers utilizing this arrangement may be concerned after a first glance at the data. In order to make it a truly compelling alternative, companies need to understand why employees value it the least relative to the other flexible work arrangements and determine whether there is anything they can do to increase its desirability.

Unlimited PTO: Problems And Best Practices

In theory, employees should be eager to maximize the value of this benefit and take more time off when offered unlimited PTO than traditional PTO. However, studies reveal the opposite to be true in practice. According to one survey, employees with access to unlimited PTO take an average of 13 days off per year—two fewer than with traditional PTO. So why aren’t employees taking advantage of their unlimited PTO?

Ambiguous Limitations

Despite its name, unlimited PTO is not truly unlimited. Under this policy, most businesses would not agree to pay employees to take a year off to tend to caregiving responsibilities, pursue options for personal or professional growth, or take a vacation. Not knowing where the line is, employees may be reluctant to take time off.

To address this, employees must first identify the limits. Through an open dialogue between employees and employers, companies can settle on a set of restrictions or expectations that are reasonable to all parties. Specifically, they should answer the following questions:

1. How many days can be taken off consecutively?
2. Does the reason for taking time off impact the number of days allotted?
3. Are there certain days or periods where unlimited PTO does not apply (e.g., during busy times or when critical work needs to be completed)?

Lack Of Organizational Support

Employees will be reluctant to take extra time off if they feel their employers don’t want them to. To solve this problem, leaders must start by aligning their values with those conveyed by their PTO policies. To make this benefit the most effective, employers offering unlimited PTO must do so with the sincere hope that employees use it to enhance and preserve their well-being.

Employers can demonstrate their genuine desire to see employees take extra time off by encouraging them to share vacation photos or highlights in group chats and team meetings. A vacation photo of the month award can help get the ball rolling.

Aside from expressing their concern for employee well-being, employers must lead by example. When employees see their leaders taking additional time off, they will likely feel that it’s appropriate for them to do the same.