Vacation has been known to promote employee happiness, lower heart attack risks, and increase productivity. Yet, American workers tossed out 400 million vacation days in 2018.
“That’s the stupidest thing I ever heard” – quotes a child actor in MasterCard’s “One More Day” commercial. And, many companies agree, turning to unlimited PTO as a potential solution for this madness.
But, does unlimited PTO really work? Many companies including Facebook and GE have found unlimited vacation time a great way to attract talent and build trust between employers and employees. Other companies argue that it’s ineffective. Kickstarter, for example, adopted an unlimited PTO plan then got rid of it when they realized employees were actually taking less time off.
Of course, we must also point out that unlimited PTO can’t work for everyone. Certain types of work, like nursing or retail, just aren’t compatible with this structure as they require an employee to physically be at work during specific hours.
We took a look at companies — ones capable of supporting unlimited PTO — to figure out why it works for some and not for others. In doing so, we discovered that most unlimited PTO failures were halted not because people didn’t like the new benefit, but because people didn’t understand it. Communication is crucial when rolling out any new employee benefit, and especially for one as vague as unlimited vacation time. Here are three ways you can effectively communicate your new PTO plan to your employees:
Clearly explain how Unlimited PTO will work for your company
When Ben’s company told him he had unlimited PTO, he ended up taking less time off than when he had a set two weeks. “I didn’t know how much time was appropriate to take off so I didn’t take off any time at all.”
Poor communication has killed so many companies’ unlimited PTO initiatives, leaving employees confused and intimidated. To make sure your employees have a clear understanding of your company’s unlimited PTO plan, create a policy that answers the following:
- What unlimited PTO is and what it will mean specifically for your company
- Why you want to offer unlimited PTO
- How your company’s previous PTO plan worked in comparison to your new unlimited plan
- How to make requests for unlimited PTO
- Appropriate examples of unlimited PTO requests
- Specific examples of what calls for abuse of policy and who is responsible for determining this
Give your employees a clear understanding of what’s allowed and what’s not, leaving no room for confusion. Salesfusion, an email and marketing company in Atlanta, helped communicate their new PTO policy by creating an FAQ document detailing appropriate amounts of time to take off and how to make a request.
Lead by example
An employee is going to feel a lot more comfortable taking a three-week vacation to Europe when their manager did the same thing a month ago.
We follow by example. It’s human nature. That’s why it is so important to have managers set examples of appropriate usage, especially in the initial stages of launching a new PTO plan.
“A competent manager should be on hand to offer individual guidance, encourage some minimum amount of time off, and be a good role model.” says Aaron Crowe, a Factual Inc. employee who believes unlimited PTO “may be the single greatest corporate vacation policy known to humankind.”
Clearly address potential scheduling conflicts and how you’ll handle them
What happens if everyone wants to take the same week off? Will employees suffer from their co-worker’s extended vacation time? Take these questions into consideration and devise plans of action for potential conflicts.
If you’ve followed steps one and two (and hire great people), your employees will likely use unlimited PTO responsibly. They’ll probably also have the common sense not to request time off during times that they know that other team members will be out. But, as always, assume nothing. Prepare for potential scheduling conflicts and train managers on how to handle them appropriately. Having pre-planned solutions in place will help combat policy abuse and will show your employees that you’re invested in fairness.
Given your company is capable of offering unlimited PTO, adopting an unlimited vacation policy could be a really great way to establish trust with your employees, attract new talent, and to increase productivity. If you’re considering bringing this benefit to your company, we hope you take these three steps into consideration.