How Unlimited Vacation Can Tip the Scales in your Favor with Top Talent
In the ongoing battle for top candidates, a liberal vacation offering is a powerful perk. In fact, a generous and flexible PTO policy does more than attract great new candidates. When designed, communicated and managed well, it can also help you retain your current employees.
So just how flexible and generous are you willing to go with your time off policy? Increasingly, organizations of all sizes – from start-ups to behemoths like GE – have gone full throttle, providing “unlimited” or “discretionary” PTO.
If that sounds crazy to you, consider the realities of your current, traditional PTO policy. If you run your PTO like most companies, you award “annual maximums” to your employees, based on their seniority and/or tenure. Managing the policy this way forces you into a bean-counting, policing role. Worse, it forces your employees to carefully ration their time off like limited commodities. What happens if an unforeseen family emergency pops up after all the PTO is used for the year? Far too often, the employee wrings their hands at their desk, hoping other family can pick up the slack because, well, “I don’t have any vacation time left.”
Does it really need to work that way? No. It doesn’t.
If your employer brand centers on employee empowerment, mutual respect and organizational transparency, unlimited PTO might be a great fit for you. As you explore this bold shift in your time off policy, keep these considerations in mind.
Unlimited PTO Builds Trust, Employee Empowerment and Better Work-Life Balance
Providing unlimited vacation sends a strong message to your team that every employee is an individual and each is trusted to make sound judgments about when, how long, and how often to take time off. You’ll need to be sure to structure and communicate the policy so employees understand that they have this flexibility based on their overall ability to get the work done, manage deadlines, and coordinate appropriately with their manager and team.
You’ll Need to Market Your Policy as Part of Your Employer Brand and Core Values
In other words, think like a marketing professional. Make sure your brand message sells this vacation policy as an expression of your core values, not just a generous feature.
Rules, Rules, Rules!
“Unlimited” is great. Chaotic is not. How far in advance will requests for planned PTO be required? Will approval processes vary, based on project team composition and deadlines? Will certain milestones have to be met before planned PTO can be taken? These are only a few of the questions you’ll need to iron out. And what about minimums? Believe it or not, you’ll likely have more challenges in getting people to take enough PTO than you will struggle with people taking “too much.” You may even find that you need to enforce minimum annual PTO days be taken. But all of these matters need to be thought through, tested and refined over time, based on the needs of the organization and the individuals within it.
Then, of course, there are actual legal requirements that can impact vacation policies. While the Fair Labor Standards Act (FLSA) actually doesn’t even require employers to provide PTO, there may be state or local regulations governing multiple aspects of your vacation policies from how it’s counted, approved, paid and accounted for at termination. No matter how well you think you understand these rules, don’t wing it. Get an employment attorney involved and make certain that everything is legal.
Unlimited PTO isn’t Just a New Perk; it’s a New Mind Set. Embrace It.
If you’ve been bean counting and policing PTO for years, you’ll likely discover some personal discomfort as you transition to this new way of thinking and managing. “As long as the work is getting done” sounds great. In real life, however, you may feel some anxiety when certain employees exceed the old PTO rules – even when they’re turning in superior work, honoring their commitments and collaborating well. That discomfort doesn’t mean the plan isn’t working. It may mean you have some work to do on your own attitudes. It can take some getting used to.
Maybe Unlimited PTO Isn’t the Right Next Step.
But if you think it could be, start exploring the possibilities now. Talk with your team about what they value about your current policy and what they wish they could change. But also invest in building a team that is capable of the levels of self-management, collaboration and whole-hearted commitment to your company’s vision and success that you need from them. Then reward that team with the most liberal, empowering PTO policy you can.