Numerous studies have revealed the importance of employees taking time off work for vacation. Leaving the office for a week or two or having an occasional day off gives employees a chance to not only take a well-deserved break to relax, but to come back to work with renewed energy and improved productivity.
Traditionally, time off is separated into paid vacation, sick and personal days. Some companies have transitioned into simply offering paid time off (PTO), which essentially serves as a single “bucket” of time off, which can be used at the employee’s discretion. A less-common option that is slowly gaining more attention, spurred on by popularity among tech company startups, is the unlimited PTO policy.
Types of PTO Policies
A basic unlimited PTO policy is similar to a normal PTO policy except employees are not given an allotted number of days off. Employees can take as many vacation, sick and mental-health days as they need, as long as they are meeting their performance goals
This type of policy does not, however, mean an employee can take unplanned time off, except for sick days or similar emergencies. PTO requests must still be approved by a manager as with a traditional PTO or vacation time policy, and your company’s established work schedule or flex-time benefits can remain the same as with traditional PTO.
For some companies, unlimited PTO policies can develop into a results-only workplace environment (ROWE). ROWE differs from a strict unlimited PTO policy in that it gives employees complete freedom to come and go when they wish, as long as they complete assigned tasks on time. ROWE operates with a hybrid of flex-time and unlimited PTO, giving employees a vast amount of freedom in determining their work schedules and the location from which they perform their work.
How much is “Unlimited”?
Studies show that, for the most part, employees with unlimited PTO frequently end up taking about the same amount of time off as employees who have an allotted amount of PTO.
In some cases, employees who have unlimited PTO benefits actually have to be encouraged to take more time off. When unlimited PTO is offered, some employees may be afraid to take “too much,” detracting from the goal of giving employees the guilt-free time off needed to take care of personal or family matters, relax on vacation or recover at home when sick.
TIG Advisors gets that finding the right balance for your employees’ PTO can be difficult. It requires a lot of trust between the employer and employee and needs a productive workplace to be productive. However, there is no “one size fits all” policy to PTO, and TIG Advisors understands that. It requires each business and employer to take a look at their situation and make the decisions for themselves, we just want to give you a helpful place to start to make the decision process easier. For a more in-depth look into the employer advantages and disadvantages take a look at this article.
