Insights into the forces shaping our industry.

Unlimited PTO – Is it good for you and your organization?

Candidate Advice, Hiring Advice, Industry Commentary

How is success measured in business, regardless of individual function and responsibilities?  I feel most would respond it’s measured in quantifiable results and not hours worked.  If you agree, does unlimited PTO make good sense for you and your organization?  Of course, any time off must be scheduled with consideration for business commitments.

According to the Bureau of Labor Statistics, the number of vacation days granted each year may vary by length of service. More than one–third of private industry workers receive 10 to 14 days of paid vacation after one year of service. After 10 years of service, 33 percent of private industry workers received between 15 and 19 days of paid vacation.  On average, workers in the U.S. receive eight days of sick leave per year and 7.6 paid holidays.  In roles that I conduct searches for, three weeks is the average vacation time offered to new employees upon their start.

Per an article in Forbes, in 2023 only 4% of companies offer unlimited PTO in the U.S.  That number jumps to 20% in the tech, media, and finance industries.  The same Forbes article shared that while not yet the norm, 70% of workers in the U.S. would like to receive unlimited PTO through their current or future employer. 

What are the benefits?

There are significant benefits to unlimited PTO – flexibility, boost to morale and retention, performance improvement, no pressure to work while sick, the creation of a trusting environment at the company, cost-effectiveness, and stress relief.  Unlimited PTO can be used as a major recruitment tool in attracting and landing top talent for open positions.

Foregoing the implementation of an accrual or bank system for vacation / sick PTO can be uncomfortable to many organizations. However, if an employee is unable to meet the performance expectations of their position, companies could explore revoking that employee’s unlimited PTO either temporarily or permanently.  

There may also be regulatory aspects associated with paid time-off policies. For example, some states require that any earned but unused paid time off be paid out upon an employee’s termination/separation, this could lead to large payouts for long tenured employees that have “banked” their PTO over many years.

Unlimited PTO is a relatively new concept and not widely adopted.   My question to you is this…If you’re an employee, would you be in favor of unlimited PTO and why?  Specifically, how would receiving unlimited PTO change the view of your employer and how would it positively impact your productivity?  As an employer or member of leadership, what are your thoughts on offering unlimited PTO?  What do you view as pros and cons?  I’d love to hear your thoughts.

Rob Wieska

Rob’s expertise at Egret Consulting is Power Distribution (hardware products plus associated controls and software), Automation Technologies (including generation products, smart grid, building automation and controls manufacturers) and Renewables (including wind, solar, battery / energy storage, EV charging, Microgrid applications) and other emerging technologies.