To change the Caveman-like policy on paid time off (“PTO”) to the new unlimited PTO means to eliminate “vacation days” and “sick days” or a specific number of days given to employees to take off each year. Instead, company would allow employees to take as much as they need without being docked any pay. Before moving on to choosing the more suitable PTO policy, we do a research and analysis to have a better understanding about the new unlimited PTO policy.
On one hand, the new unlimited PTO policy has some advantages. First of all, this new PTO policy would let employees recharge. The unlimited PTO policy allows employees to schedule in week or two-week-long trips that might not be possible under traditional PTO policy that now is being implemented in our company. The unlimited PTO is a good way to incentivize employees to take the break that could bolster their work output (Griswold, 2013). Studies have shown that people have limited attention and that job performance is improved by both short and long breaks. Indeed, more than 90% of HR professionals believe that vacation improves wellness, morale, performance and productivity, according to the Society for Human Resource Management’s (SHRM’s) 2013 Vacation’s Impact on the Workplace survey report (Milligan, 2015).
Secondly, by implementing the unlimited PTO policy, company would have a more engaged workforce. Management is trusting employees to manage their own time in a way that serves their personal needs while still getting the work done. It also can be considered as a key selling point for the current and potential employees, and a way to build loyalty to the organization and engagement among workers (Sammer, 2014). In addition, the unlimited PTO policy extends employees a certain degree of trust, because the unlimited PTO relies on employees to take time off within reason. It is says that employees in high-performance organizations respond to that trust by carefully planning how they will take time off and still complete their workload (Griswold, 2013).
Thirdly, company can use the unlimited PTO policy for recruiting. Unlimited PTO could be seen as a “talent acquisition tool”. The benefit is extremely attractive to potential hires. It is also a compelling benefit for many workers. The impact can last long after recruitment. A 2012 survey of 2,094 adults sponsored by Ask.com found that 69% would be more inclined to take a new job if the company offered unlimited PTO (Sammer, 2014).
The last advantage is that the new policy could save company’s money and time. The unlimited PTO policy saves the cost of tracking and managing company’s PTO schedule. It also eliminates the liability and unexpected expense of paying out accrued and unused vacation days when employees leave. Some employers with unlimited PTO policy point to the administrative time saved because HR staff no longer has to track and police the use of accrued vacation time for each employee. Ask.com calculated that its unlimited PTO policy saves 52 hours a year in administrative time (Sammer, 2014).
One the other hand, there are also some disadvantages of the new policy. First of all, it can be hard to implement fairly. The biggest stumbling point with unlimited OPT policy is ensuring that all employees are given equal opportunity to take their time off. The obvious problem is that everyone can’t be out at the same time. If we want to implement the unlimited PTO policy, we need strong managers who can juggle a vacation schedule that is fair to all and effective for the business (Griswold, 2013).
The second problem with unlimited PTO policy is that many employees are skeptical of such policy and they don’t take advantage of it. The typical U.S. employee with paid vacation time took just a little more than half of his or her allowed time off in the previous 12 months, according to an April 2014 Harris survey conducted for Glass door. Just a quarter reported taking all the time off given to them, while 2 in 5 said they had taken 25 percent or less of their available time off (Milligan, 2015). For these employees, they may have the perception that when say “unlimited vacation”, it really means that there is “no vacation”.
Finally, the most serious and important thing is that using the unlimited PTO policy would have potential for employee abused. If an employee chooses to abuse the unlimited PTO policy, it can be difficult to terminate the employee for absence because he or she is technically allowed to take that time off. The possibility of employee abuse exists, but there are ways to curb it. For example, we can limit how much time off employees can take at once, implement companywide systems requiring preapproval of vacation time, and ensure fair and equal treatment across the board. Establishing and reviewing performance goals can also help mitigate this challenge (Unlimited, n.d.).
According to the analysis, I would suggest our company try the unlimited PTO policy. It seems that implementing the unlimited PTO would get more benefits than the traditional Caveman-like PTO policy. Although it has some disadvantages, we still have some practices to solve them as mentioned above. It seems like to add some limits to the unlimited PTO would bring a better performance of it. For example, have an established review process to track performance and goals before implementing unlimited PTO. Besides, to reduce abuse of the system and minimize the impact on the rest of the team, PTO should be approved in advance by the manager, with the exception of calling in sick or for another emergency (Unlimited, n.d.).
Considering we are young both the company founded 5 year ago and our employees who’s an average age is 27 and no employees over the age of 38, we can probably adopt the unlimited PTO policy quicker. From“2015 Workplace Flexibility Study”, we can know that that younger generations benefit more from their flexibility program, just like the unlimited PTO policy, than older generations (The 2015, 2015).
In addition, our company wants double in size and revenues over the next two years. The unlimited PTO policy is really a helpful and good factor for our goal. The unlimited PTO policy can be a powerful recruiting tool. A 2012 survey of 2,094 adults sponsored by Ask.com found that 69 percent would be more inclined to take a new job if the company offered unlimited PTO (Sammer, 2014). The 69% of top benefits organizations use their flex programs as a recruiting tool and 54% said that their programs positively impacted their recruiting (The 2015, 2015).
At last, the key to getting an unlimited PTO policy to work is to create the right culture. That means setting a standard of mutual trust, where both worker and employer trust each other not to abuse the system (Milligan, 2015). Because of our dynamic open operating culture and pays our talent above the market, we are an ideal candidate for this kind of leave plan, which an organization has a culture of trust and responsibility with employees who can effectively and independently manage their time to produce high-quality work.
Unlimited PTO policy is becoming increasingly prevalent and it is worth considering. However, switching from a traditional vacation policy to unlimited vacation can be tricky. It’s always difficult to be the one extending trust, hoping employees will believe your act to be sincere and reciprocate. (Burkus, 2015) Therefore, we need to do some preparations if we want to implement it, such as cultivating trust, setting goals, and planning ahead. Good preparations will bring good results in the unlimited PTO policy, which would drive staff engagement and overall firm performance.