Unlimited Paid Time Off, is it a good idea?

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That sounds like a dream doesn't it? "Unlimited paid leave". You could go on that trip to Japan for two weeks, come back, leave for Korea after a month, and no one would even blink an eye. The idea of unlimited paid time off is a great incentive to work under, but is it really all that it's cracked up to be?

Unlimited paid leave might actually hinder performance and productivity. It's a slippery slope and if you're drawn into the splendor of unlimited PTO, think again. There are a variety of reasons why unlimited PTO is a bad idea for an office. The key thing to look at when considering unlimited paid time off is how you work. This policy can work for different people, depending on their working style. If an employee is accountable and collaborative, unlimited PTO can be great. However, if an employee doesn't play along well with others and has problems hitting deadlines, this could spell disaster.

The Good

There are positives and negatives to this sort of policy. It won't fit every company that tries it out. Let's break down some of the positives first so that we can have a better understanding of all of the facts.

Work-Life Balance

This is one of the biggest positive spins about an unlimited vacation benefit. Having the ability to set your own schedule and time for holidays and paid time off is a huge boon. Usually, the only rules that employees have to abide by are that their paid time off doesn't affect their work or the work of others. If a person can handle their own workload within their own time, and communicate that effectively with their team, an unlimited PTO plan is great. It can offer more freedom and flexibility in scheduling. It can also have the added benefit of more productivity. Having the freedom to choose where you work from is a huge incentive for some people, especially those who are used to working remote.

Cultural Innovation

Having a company culture that promotes a healthy lifestyle where you can take time off on your own hands can be a huge morale booster. People are becoming more invested in finding a company that has a strong culture. Culture is slowly edging out other benefits, so much so that people are willing to take a lower salary or a fancier title for a company that has strong company culture. An unlimited paid time vacation policy stands for a company that trusts their employees enough to do their job without hindering their own personal lives. It puts the trust on the employees to handle their responsibilities for the good of the company and themselves.

Financial Benefits

Beyond the cultural and personal benefits, an unlimited vacation policy has financial benefits for the company as well. When you have a set vacation policy, any vacation days that are unused and that can be rolled over represents a large amount of accrued expenses for the organization. Unlimited vacation also prevents employees from taking huge chunks of holiday at the end of the year to prevent any loss of their PTO.

The Bad

Now that we've gone over the good points, let's take a moment to break down why unlimited paid leave is a bad idea.

Bad Organization

It takes a lot of preparation to pull off an unlimited paid time off policy. For established companies, it takes time to put things in place so that everybody understands what's going on. It's also a culture change when a company implements something like this. For employees who don't handle organization well, it can be hard for them to follow the rules of paid time off. A lot of problems can come from an employee who doesn't understand that they need to inform their team of what they're working on so that there are no loose ends.

Unrealistic Expectations

Want to take off for a month to travel around Europe? With an unlimited vacation plan, that might seem plausible, but it's doing nobody any favors. You can't drop work for a month at the tip of a hat. There are plans in place that needs to be made, and an unlimited PTO plan might give people the wrong idea about how they should handle their vacations. The last thing a company wants is somebody abusing their policy.

Guilt

There are people who feel guilty for taking holidays (even though it is your right as an employee of a company). An unlimited PTO plan makes it even harder for an employee to set their time because they'll feel guilty if they take off too much time. You might feel bad because the rest of the office has to cover for you while you take off time to go have fun, so you cut your trip a little shorter so you don't feel as bad.


One Size Does Not Fit All

The main thing to remember is that unlimited paid leave can be a boon for certain companies and cultures, but it can also be a problem. As a potential employee, you have to do your due diligence when finding companies that offer unlimited paid leave. Make sure their culture encourages work-life balance and a sense of responsibility. You need to know that everyone in the company, including yourself, is capable of handling anything that is thrown your way. That's the only way unlimited paid leave can work.

Chris Chu

Freelance writer, passionate about professional and personal development.

4 min read

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