When unlimited PTO first surfaced in Silicon Valley startups in the early 2000’s, it wouldn’t be taken seriously by other companies for another 10-15 years. It seems to have grown in popularity now, after having been spurred forward as a trendy recruiting and retention strategy to help companies cope with the loss of workers through the Great Resignation and Reshuffle. Whether you’re in favor of it or against it, implementing unlimited PTO is a bold move and we’ve seen mixed results across our client base. Here’s the scoop on how unlimited PTO is really going for employers and what you should think about when deciding whether it makes sense for your company:
In our experience, implementing unlimited PTO has not led to any dramatic changes in employee habits. Companies with cultures that support and encourage PTO have employees who use their time very similarly to how they did prior to gaining the benefit and don’t tend to abuse it. And companies who have historically had a culture that has not supported or encouraged PTO still struggle to get employees to take it–whether it’s unlimited or not. Interestingly, data from the Pew Research Center reports that out of nearly 6,000 employees surveyed in 2023, about half reported the fear of falling behind at work as a top reason keeping them from using all of their PTO. So if you’re going to implement unlimited time off, your culture and leadership team must also support, promote, and enable taking time off in general if you want your employees to feel the value of the benefit.
Contrary to what it might seem like, all the cool companies aren’t doing it, even though sometimes it seems like they are. According to multiple data polls, only around 4% of U.S. businesses offer unlimited PTO. So while it’s certainly a trendy and modern concept, the reality is that most businesses are not offering it. And it’s important to note that employees still consistently rank flexibility, work/life balance, and remote work capabilities of much higher value than they do PTO benefits.
With our clients, we’ve seen unlimited PTO work best in companies with strong managers and in environments where work assignments are clear and accountability is high among employees. These factors impact how well people plan, ask for help, and feel invested in their work. It also helps them more appropriately gauge when they can and can’t take time off without missing key deliverables or having to offload too much work to other team members at a bad time.
Unlimited PTO can certainly be a cool differentiator in your recruiting process…but only if you have a culture and environment (as outlined above) where it makes sense to implement it. The concept is certainly attractive to Millennials and Gen Z employees in particular, but it’s not a replacement for other more meaningful things like schedule flexibility, remote work, a positive culture, and a well connected team.
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