Most companies offer paid time off for vacations, sickness and personal reasons, but the amount varies greatly. The old standard used to be two weeks of paid vacation and one week of sick/personal time. Then companies used PTO as an employee retention tool, offering more time off to longer tenured employees. Some companies offer four weeks paid time off to all employees. Now this has evolved into a new concept of UNLIMITED PTO.
The thought of unlimited PTO is a concept that provokes strange responses. Managers fear employees spending six months on a tropical beach and no one in the office to perform the work. Employees don’t always trust it and fear that it a paper-only policy that won’t actually be allowed. The truth is that it is more of a company culture than an employee benefit. Its goal is to enhance employee morale and health by avoiding burnout and giving them time to rest and be with their families. This creates a positive work environment that helps in recruiting and employee retention.
However, there are some keys to making this policy successful. First of all, management must set the example and make sure that they are taking their vacations so employees know it is real. Second, employees should be encouraged to take their vacations. Third, employees must be adequately cross trained to make sure that there is adequate coverage to allow workers to take their vacation time. Last, have a proper performance management program to track employee performance in meeting their own and company goals.
If managed properly, unlimited vacation policies can be very successful. Currently, 41% of workers take no vacation and over time this will affect their productivity. Others come to work when sick to conserve their paid time off, the result of which can be getting many of their coworkers sick. Yes there could be some who abuse the practice. However, these can be managed through the performance management program and terminated for not meeting their goals. And as with current policies that limit vacation, employees still need to schedule their time off in advance and companies can deny it if it coincides with a big project or deadline. In the end though, if managed well, an unlimited PTO policy can provide tremendous benefit to an organization and its employees.
For more information on unlimited PTO and other human resource policies, contact John Morlock at Total Team Solutions. For more than 30 years, Total Team Solutions has provided human resource outsourcing services to help small businesses in Connecticut and New York become more efficient by managing their payroll, benefits, regulatory compliance and employee relations matters. Contact us for a free consultation on how our services can help your small business.
John W. Morlock
Chief Operations Office