The Pros and Cons of Unlimited PTO

Jordan Scott
Jordan Scott
In HR
Jordan Scott is the Content Marketing Manager at Xactly. She attended The University of California at Santa Cruz, and received degrees in Literature and Education.

A growing trend among many companies is to eliminate “vacation days,” or a specific number of days given to employees to take off each year, and instead allow them to take as much PTO they need without being docked any pay. Organizations that embrace this strategy are likely thinking about building a culture that prioritizes results over face time.

Below are the pros and cons of unlimited PTO:

Pro: Flexibility

Imagine this scenario: your in-laws plan a surprise visit at the end of July and you’re out of vacation days. Your spouse balks at the idea of being home with your parents and the kids without you. Instead of leaving your husband or wife hanging, you’re able to come home and spend quality time off with your family. You might have to work a few nights or extra hours the following week, but unlimited vacation time takes the unpredictability of life into account and removes the stress of unexpected occurrences. While a very small percentage of companies have  hopped on the bandwagon, a company spokesman for Netflix (which has unlimited PTO) said, “People appreciate the flexibility and do a good job of balancing their vacation time with those of others and the work we all aim to get done.”

Con: Confusion

When a company rolls out a new policy, employees may not be sure what the new program really entails. In the case of unlimited PTO, employees might not understand that while it’s ‘unlimited’, it is not without boundaries. It’s a subtle difference, but unlimited PTO is still monitored, kept track of, and requires as much advanced notice as is possible. You can’t just jet off to Brazil for two months and expect your old position to be waiting for you.

On the other side of this confusion is the overcautious employee, who never takes any time off. I talked to a friend about his experience with an unlimited PTO policy, and he said he actually took less time off because he wasn’t sure how much vacation time was appropriate to take with the new policy.

If a company decides to instate a major benefits change, it needs to be explicitly communicated that the unlimited days are being given so that employees take them. One of the major goals is to ensure that a workforce is relaxed and rested so that they can give work their all when they are in the building.

Pro: Build a results-driven culture

Sure, it’s great to have people in their seats because it helps contribute to a lively culture, but when you really think about it, the bottom line at work is the creation of quality work. If an employee can lead their team, follow-through on goals, and still make it to the lake house for five days, more power to them. It might even build loyalty due to your workforce feeling trusted to effectively balance their work and personal lives.

Con: People taking advantage of the policy

With any benefit policy, you’re going to have people that take advantage of the system. With unlimited time off, as with working from home, it’s most important to know your employees well enough to know if this will be a successful structural change or not. A policy like this requires a good deal of trust and integrity on the part of both the employer and the employee.

What do you think of unlimited PTO? Great idea, or workplace blunder? Tweet @Xactly and let us know!


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The Pros and Cons of Unlimited PTO

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