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The pros and cons of unlimited PTO

The pros and cons of unlimited PTO

What is unlimited PTO?

In the world of benefits, PTO has become a top priority for employees and job candidates. Eager to retain current employees and to attract potential new hires, many employers have started to offer unlimited PTO plans.

What is unlimited PTO? As the name suggests, unlimited PTO plans are structured so that employees decide when to take PTO and how to use PTO. The employer provides little-to-no parameters in this type of plan—as long as tasks are accomplished as expected and the organization does not suffer negative repercussions. Here are the pros and cons of unlimited PTO:

Unlimited PTO Pros

Employee trust increases work performance

According to the Society for Human Resource Management implementing an unlimited paid time off plan, "can lead to a more engaged workforce because management is trusting employees to manage their own time in a way that serves their personal needs while still getting the work done."

Similarly, a study published by the Journal of Economic Behavior and Organization reports a positive relationship between employee trust and workplace performance. When employers allow employees to self-manage, employers communicate that they trust the employee. With that trust, the employee is more likely to feel a greater responsibility over the outcome—especially if the outcome directly impacts that individual''s personal well-being.

No end-of-year PTO Rush

Its the end of the year and employees have extra PTO days accrued. Because nobody wants to lose PTO days, everyone takes off time at the end of the year. For an employer, this means an understaffed office and lost productivity. Unlimited PTO prevents these.

Employers can mitigate this problem with an unlimited PTO plan by removing the "use it or lose it" mentality.

Unlimited PTO cons

Employees could take advantage of PTO

As an employer, the phrase, "no rules" probably makes you more than a little apprehensive. By relinquishing control over PTO, you are trusting that employees won't take advantage of their freedom—a real possibility.

Increased need for administrative communication

Employers should also be aware that unlimited PTO doesn't necessarily eliminate management. In fact, for unlimited PTO to work, a solid communication structure must be put in place. Without explicit communication of performance expectations, employees are left to interpret expectations which can cause conflict on multiple fronts.


Prominent companies using this method


              Virgin Group



              General Electric

Making a decision

While these sources conclude that unlimited PTO plans can benefit organizations, the success of such a plan depends on the unique culture and identity of an organization. When deciding on a PTO plan for your organization, be sure to take into account factors such as:

               Current employee trust level

             ⇨  Employee ability to complete work remotely

               Overall ability of employees to self-manage PTO

               Alternative measures of accountability


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