No More Vacation Time! Instead, Take All the Time You Need

No More Vacation Time! Instead, Take All the Time You Need

Unlimited paid time off (PTO), really? Maybe it’s because I am inching up on 50 years old, but when Scott Cytron, editor of the Firm of the Future blog, suggested this topic for an article, I was absolutely SURE that I was going to find that this was one of those strategies that sounds great in the abstract, but proves completely unmanageable after it is unboxed and put in motion.

Then I remembered that QuickBooks ProAdvisors® are all about things that are newfangled, and unless I’m ready to turn in my cloud accounting T-shirts, I better give the subject matter a fair shot … so I phoned a friend.

Jennifer Ewing, people strategist at Human Resource Partners of Traverse City, Mich., answered the call. Jennifer has seen unpaid time off policies in action – and they work! She shared a specific experience with the holding company of a local food distributor and manufacturing facility. The holding company elected to roll out an unlimited PTO policy to its administrative staff with the following guidelines:

  • Employ a simplified PTO strategy: all types would be rolled into one payroll item, so sick time, vacation, jury duty and bereavement would be redefined to PTO.
  • Target the Program Availability: the policy was available to salaried (exempt) employees.
  • Structure Approval between Employee and Manager: PTO had to be requested in advance.
  • That was it. 

The results were better than the company anticipated; they continued to track PTO after the conversion and found that employees took fewer PTO days under the new policy. Management had to encourage employees to take vacation! Human Resource Partners attributed the lower PTO use to the fact that the “use it or lose it” PTO policy was no longer in force. Employees knew they could always take time if they had to. 

Jennifer explained that the benefits to the company extended beyond less PTO on the books. The change in policy forced the company to dig in deeper and review what it really wanted from the employees. It embraced the idea that attendance did not guarantee performance, and understood that just because a player is at the plate doesn’t mean he or she is hitting a home run. Instead, the company got the chance to redefine what it hoped its employees could achieve for its clients.

I call this “running the logic chain.” Why are we here? Who do we serve? How do we best serve them? Answers to these questions are further refined into projects and tasks that all point to the company mission and can be assigned to employees.

The upside was clear, but where can unlimited PTO go wrong? There are potential roadblocks:

  • Industry Type: Unfortunately, restaurants, assembly lines and other organizations that require daily coverage due to store hours or customer service support lines may struggle incorporating this type of PTO policy.
  • Divisional Equity: Organizations that have manufacturing and administration tiers have equity issues to contend with. It could be problematic if one division was awarded flexibility when another was not.
  • Communication is Vital: Companies may have to adopt a new way to define, communicate, and track projects and tasks. Project management software such as Asana or Slack can help open lines of communication and provide necessary feedback loops.
  • Leadership Culture Shift: Management may have to learn how to lead differently. Jennifer recommends “Becoming a Leader-Coach” available at the Center for Creative Leadership. 

In addition, other details to consider include:

  • When does short-term disability kick in?
  • How do you define abuse of the policy?
  • What is the process to address abuses of the policy? 
  • How can management ensure the company is prospering under the new policy? 

Despite the potential roadblocks, unlimited PTO shows promise for firms and companies in industries that can support project-based work and are ready to accept the challenge to redefine what productivity means. The company transitions from stressing an attendance-based work philosophy to one that is more performance-based. The policy is a vote of confidence in favor of the employee on behalf of management. This is something definitely something worth a look!