The Case for Unlimited Paid Time Off (PTO)

The Case for Unlimited Paid Time Off (PTO)

By MarkD

“There is virtue in work and there is virtue in rest.  Use both and overlook neither.” – Alan Cohen

The United States ranks 11th in the world in annual individual productivity according to Expert Market.  According to the same report, out of the top 22 most productive countries in the world, the United States works more hours than the other 21 countries on the list.  Luxembourg, Ireland, Norway, Switzerland and Denmark are the top 5 most productive countries in the world.  You would think that would end the argument right there.  Employers should offer more PTO to their employees.  Employees should take more PTO.  But I’m just getting started as I make the case for Unlimited Paid Time Off.

How Do the Top 5 Do It?

In Luxembourg, the legal duration of annual leave is set to a minimum (that’s right, minimum) of 25 working days per year.  In Ireland, all full-time workers receive 20 paid days off each year, this is in addition to the 9 paid national holidays. Employers in Norway are required by law to offer 25 paid vacation days per year, plus public holidays. It is not uncommon for many in Norway to take 4 weeks off every summer. Conversely, the United States has no law requiring any paid vacation days.  Whether you work full or part-time in Switzerland, you are entitled to at least four weeks’ paid vacation annually.  And in Denmark, every employee is legally entitled to 5 weeks of paid vacation per year.   Are you ready for this?  In the United States, the average amount of PTO for workers is 10 days.  It gets worse.  55% of us don’t even use all of it.  

So why am I making the case for Unlimited Paid Time Off when Employees aren’t even taking vacations?  

Because they should.  Perhaps they’re not taking more because it’s just not enough time to make it worthwhile.  Imagine wanting to go to Hawaii for 5 days, but you only have 3 days left of PTO for the year.  Rather than taking those 3 days and trying to cram in a vacation, you might not take it at all.  You might become bitter at work.  You might become resentful and your productivity might decrease.  As an Employer, is it worth not providing those 2 extra days to your staff?  I say to you nay.  

Do They Even Want Unlimited PTO?

At DyNexus Recruiting & Staffing, we recently conducted a poll asking Job Seekers how much PTO they would like to be offered.  Only 5% of those surveyed said they prefer 6-10 days.  18% said 11-15 days.  24% said 16-20.  And 53% of those surveyed said they would like to be offered Unlimited PTO.   Job Seekers during the current pandemic stated they were willing to turn down bigger salaries for the option to work remotely.  According to a survey conducted by Harris Poll, half of workers surveyed said they would also forego higher wages for Unlimited PTO.  Only about 9% of workers say their employer currently offers it.

But They’ll Abuse It . . . Won’t They?

Between 2015 and 2019, there was a 178% increase in companies offering Unlimited PTO.  So how is any work getting done?  There’s actually an unexpected twist to the story.  Workers with Unlimited PTO have actually been taking FEWER vacation days.  On average, employees with Unlimited PTO at their disposal have been taking 13 days off annually.  Workers with a more traditional PTO plan are taking an average of 15 days off.

Make Them Take Time Off

More and more employers are recognizing the value of happy, healthy, relaxed, motivated workers.  As we’ve already shown, workers who take vacation time are more productive than those who don’t.  There is this unfounded presumption that if you are the first one to work, the last one to leave, never take time off, you will be the one to get the raise and the promotion.  That’s not the case.  Why?  Employers want quality AND quantity.  Employers want staff who are positive and loyal and productive.  And those workers . . . they take vacations.

So some companies are actually getting creative by MAKING employees take vacation time.  One suggestion, instead of setting a maximum number of days you can take off a year, set a minimum.  That’s right.  In addition to paid holidays, some companies are including a minimum number of paid days off their staff should take annually.

Companies like Airbnb, BambooHR, Evernote, and Expedia actually PAY their employees to take a vacation.  BambooHR offers employees $2000 specifically to spend on vacation.  At Evernote, it’s $1000 as a yearly stipend.  And Expedia reimburses up to $750 of travel expenses for their employees. 

Some employees are concerned about the mountain of work that will inevitably be waiting for them when they return from PTO.  Hubspot came up with a solution to that: an annual global week of rest.  During the week of July 4th every year, every employee gets an entire week off so no one is piling up the work to be done while just a few take their PTO.

Nearly half of U.S. workers have experienced some mental health issues since the beginning of the pandemic.  Yet the majority of workers are embarrassed to ask to take a mental health day.  They fear their boss will not see it as a legitimate reason to take time off of work.  Some companies are combating this unhealthy stigma by offering Well Days as part of their PTO plans.

To Drive It Home:

Okay, so across the globe, there appears to be a correlation between taking time off and being more productive and happier and more loyal.  But you probably need a little more convincing right?  After all, your company is in the United States, not in Luxembourg or Ireland.  Let’s take a closer look at home.  According to a study by the America’s International Foundation of Employee Benefit Plans:

  • Employees who take their annual leave are 40% more productive.  They are also less irritable, depressed, forgetful, and easily fatigued.
  • Without breaks, employees become 65% less creative and miss deadlines
  • Well-rested employees are 38% less prone to workplace accidents
  • Employees who take their full annual leave are 28% less likely to take sick leave

And, according to Project: Time Off:

  • You are 30% more likely to receive a raise if you take 11 or more PTO days
  • You have a 6.5% greater chance of getting a promotion or a raise over your peers if you take all of your allotted PTO time.

It’s pretty clear, you are working too many days and too many hours without a break.  And it’s costing you dearly.  Whether you’re a business owner or an employee.  Every study shows that you are more productive, happier, less irritable, more creative, more engaged, and more likely to get raises and promotions if you take MORE vacation time.  So, employers, it’s not enough to just offer Unlimited PTO.  Clearly your employees aren’t going to abuse that privilege.  You must also encourage your staff to USE their PTO.  And employees, take your PTO.  Take a day off and binge watch Ted Lasso or sit in the park.  Your mental health, your family, your co-workers, your boss will all thank you. 

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