In this week’s blog series, we’ve been talking about the concept of unlimited vacation time or unlimited PTO. It’s something a lot of companies are either already embracing, or considering.

Even as it becomes popular, some companies that try it find that it’s not right for them. So how should you assess whether or not an unlimited PTO policy is good for your company?

Below are some specific considerations to weigh, and also examples of some companies that have implemented these policies.

What To Think About with Unlimited PTO Policies

This list certainly doesn’t cover all the things to consider, but it does give you a good starting point if you want to implement unlimited PTO:

• Is this something you can offer to all employees? If not, it may not be right for you because your employees can claim you’re discriminating against them if you don’t offer them the same time off options as other employees.
• Some employees are going to see this option as very unfair. If an employee has been with the company for decades and then someone new comes on board and has the same amount of vacation time, you could be met with frustration and resentment from certain employees. In a lot of workplaces, vacation time is seen as an earned benefit, so there could be the perception that new employees are getting things they haven’t earned. A business where this wouldn’t be a problem would be a younger business, where everyone is relatively equal regarding the time they’ve spent with the company.
• If your employees were previously able to accrue vacation time, and then you move to an unlimited policy, you are likely going to have to pay that time out. That can be expensive, as was touched on in our previous post.
• Can you measure employee productivity pretty easily? Most businesses that have these policies in place and have had success with them are organizations where it’s very easy to measure employee productivity. Flexible hours and a sense of independence are in-line with the way these businesses operate because as long as they can see that productivity is where it needs to be, flexibility is no problem.
• Is your business seasonal, or is there a lot of interaction with customers in a personal way? If so, you may not be the best fit for unlimited vacation time.
• How self-motivated are your employees? Do you know for sure that they’re self-starters and motivated without a lot of external influence? If you have employees who require a lot of direction as to what to do and when to do it, it’s probably best to avoid an unlimited vacation policy.
• Are your managers equipped to deal with some of the things that can come along with unlimited PTO? For example, are they going to be more likely to turn requests down than they would if someone had a set number of days? Is it going to be difficult for them to juggle coverage under this kind of system?
• Is your organization one that’s driven by the desire to succeed? Do people including managers and company leaders regularly work long hours and avoid time off? If so, having an unlimited PTO policy can actually make employees less likely to take vacation time, because they are unsure what’s expected of them. This can lead to employee frustration and burnout.
• Do you currently have a leave management system or leave tracker in place? It may seem counterintuitive but having one of these platforms can be even more vital under an unlimited PTO policy, because this is how employees request time off, and things are managed in a streamlined, efficient manner.

Finally, you’re just going to have to think about whether or not this is even something your employees want. This is touched on in some of the criteria above, but the best way to figure out if this system could work for you is to ask for employee feedback. You could be surprised with employee pushback on the concept.

Is this everything to think about? No, but it does give you a place to start. So what about companies with unlimited PTO currently? Below is a brief example of a few.

Companies Offering Unlimited PTO

InfoTrust

According to an Inc.com report, InfoTrust is a company that enacted unlimited PTO as a way of treating employees with respect, autonomy and like adults. The Marketing Manager for the company, Kaylie Kipe, said that every person knows what they need, so if they need to stay home, or if they need a vacation, they should be free to take that time. Kipe went on to say that the company prides itself on delivering work-life balance.

Kickstarter

While you might hear a lot of Cinderella stories from companies offering unlimited PTO and vacation time, Kickstarter wasn’t one of those success stories. A couple of years ago, Kickstarter announced they were ending their unlimited PTO program. Kickstarter kept a sense of generosity in its policy, capping employee vacation time at 25 days. However, there were guidelines in place following the change. Kickstarter said in a BuzzFeed news report that when they set no specific parameters with regard to time off, people had difficulty taking any time off. Employees weren’t taking time, and they were feeling guilty if they did, which is why the program ended at the company.

Netflix

If there’s one company in America that has seemingly led the charge on modern ways of managing employees, it’s Netflix. The media giant has one of the most widely publicized unlimited PTO policies. Netflix has actually been offering this work perk for a long time, and they were one of the first companies to do it. Netflix is thriving, so it seems to be working for them.

Keep reading our next post in this series, with guidelines on how to implement an unlimited PTO policy in your workplace.