Is Unlimited PTO Right For Your Business?
As younger generations continue to make their way into the workforce, companies are looking for new ways to compete for top talent. After all, we all know how difficult it has become to attract and retain great employees.
One relatively new and buzzworthy tactic some businesses and organizations have pursued over the last several years is the adoption of unlimited paid time off (PTO) policy – and for good reason.
According to the Society for Human Resource Management (SHRM), some employers, including several start-ups, rapidly growing companies with innovative cultures and others, have said their unlimited PTO policies have been met with great results. In fact, many business leaders say they believe, because more and more business is actually being conducted outside the traditional 8-5 workday, offering unlimited vacation is the next step in a natural progression of today’s modern working world.
“The rationale is that employees will manage their own time well because it is in the best interest of their careers to do so,” states an article by SHRM. “The only requirement is to make sure everyone is up to date on the employee’s work and that the employee’s absence will not damage the business.”
Adopting an unlimited PTO strategy is not only a great way to help your business stand out among the competition; it could potentially save your company a fair amount of money.
According to many business owners, PTO programs that allow employees to roll over and bank unused time can result in a huge expense for the company. An unlimited PTO program eliminates this problem. Additionally, companies will avoid the end of the year rush that often occurs when employees rush to use up their remaining vacation days.
In fact, companies that have adopted an unlimited PTO policy have reported that, when given the freedom of taking as much time off as they want, employees don’t actually take more time off than usual. In fact, there may be some hesitation among employees to take advantage of the unlimited PTO concept.
While the concept of unlimited PTO may be desirable for some companies, others would have a hard time implementing this type of policy. At the end of the day, it truly depends on the expectations you have on your workforce.
How To Successfully Implement Your Unlimited PTO Policy
Deciding whether or not an unlimited PTO policy is right for your organization can be difficult, which is why it’s important to put together a knowledgeable advisory team. In addition to your human resources team, be sure to include professionals who can help navigate potential legal issues as well as a financial expert who can help you understand how this type of policy will impact your company’s bottom line.
Here are some other best practices to consider when implementing this type of policy.
- Just because there’s no maximum, doesn’t mean there shouldn’t be a minimum. A lot of companies have reported confusion among employees when they finally go live with their unlimited PTO policy. After all, this kind of freedom in the workplace is a new concept. Your policy should address this confusion by placing a mandatory minimum of PTO that must be taken.
- Identify your process. Remember: unlimited doesn’t mean free-for-all. Make sure your policy outlines the process your employees will use to request PTO, including how to contact a manager about the requested time off, how work will be delegated and how others on the team will be notified of the employee’s absence – among other considerations.
- Identify a communication strategy and stick to it. Employees often cite poor communication as their top gripe in the workplace. When dealing with the implementation of a policy of this caliber, communication is essential. Furthermore, drawing up the policy will require just as much employee input as rolling it out. The Los Angeles Times learned this lesson the hard way. So be sure to do everything you can to facilitate buy-in every step of the way. A proactive internal communication strategy is essential.
Email Rea & Associates to learn more about the benefits of an unlimited PTO policy or to learn about other tactics that can help give your organization an advantage in the recruitment marketplace.