Most of us dream of more free time to relax or travel or spend time with loved ones. Unlimited PTO (paid time off) is a policy that allows employees to take as much time off as they need, without a set number of days allotted per year.
Sounds too good to be true? Maybe. Here I’ll explore how unlimited PTO works as well as the pros, cons, and best practices.
How Does Unlimited PTO Work?
Unlimited PTO allows employees to take as much time off as they need, without a fixed number of days. Here’s how it typically works:
1. No set time limits
Employees are not assigned a set number of vacation or personal days. They can request time off as often as they want, as long as their work responsibilities are met.
2. Approval process
Even with unlimited PTO, employees generally need approval from their manager before taking time off. This ensures that the time away won’t negatively affect the team or company operations.
3. No accrual of days
Since there are no limits, employees don’t accrue vacation days over time. This means there’s no need to track the number of days an employee has earned, and there’s no payout for unused days if they leave the company.
4. Focus on results
Unlimited PTO policies are based on trust and performance. As long as people are meeting their goals and contributing to the company’s success, they’re free to take time off as needed.
How To Use Unlimited PTO
Unlimited PTO is a new concept for most people, so how do you navigate these unchartered waters?
Understand your company’s policy
Each company, and probably team, will have its own written and unwritten rules for implementing unlimited PTO, so it’s essential to familiarize yourself with the specific rules and processes for requesting leave to stay in good standing.
Request, don’t demand
Although you can take time off as your workload permits, remember to frame your PTO as a request rather than a demand.
Unexpected situations may arise, and showing respect for your team’s needs fosters a cooperative work environment.
You can probably request time off in advance using your org’s HR software or HR software for small businesses.
Stay flexible
If unexpected work arises or multiple employees request time off during the same period, consider adjusting your PTO to minimize disruption. Flexibility helps maintain smooth operations while still allowing you to take your time off later.
Disconnect during time off
Unlimited PTO may take some getting used to, but once you’ve ensured your tasks are completed or covered, enjoy your time off without worrying about work. Trust that the company can function smoothly in your absence.
As we’ll go into, effective unlimited PTO is born from good management and leaders practicing what they preach!
Pro: It’s a great recruiting tool
- Attractive benefit: Unlimited PTO can be viewed as a desirable benefit, especially in competitive job markets. It signals trust and flexibility, which is appealing to top talent, particularly in industries where work-life balance is highly valued.
- Differentiator: Offering unlimited PTO as a fringe benefit helps a company stand out from others that provide a set number of days, making it a useful recruiting strategy to attract quality candidates.
Pro: It can contribute to employee wellbeing
- Improved work-life balance: Unlimited PTO allows people to take time off when they need it, whether for personal obligations, vacations, or just to recharge. This flexibility helps them better balance work with personal and family life, reducing stress and improving overall life satisfaction.
- Prevent burnout: With no strict limitations on time off, people can take breaks to deal with life, manage stress, and prevent burnout, which can improve their well-being. Taking time off for self-care, vacations, or hobbies helps people recharge, enhancing productivity and creativity when they return to work.
- Fosters trust: Unlimited PTO signals to employees that the company trusts them to manage their work and personal time responsibly. This can boost morale and motivation, as employees feel empowered to take control of their time and productivity.
Pro: Supports long-term retention
- Valuable perk: People value this benefit and it will contribute to their decision to remain at the organization, rather than go somewhere less flexible in this regard, improving employee retention.
Pro: Simplifies leave policies
- Combines different types of leave: In many companies, employees have separate buckets for vacation, sick leave, and personal days. With unlimited PTO, all types of leave can be merged into one flexible policy, simplifying leave management and eliminating the need to distinguish between various types of time off.
- No year-end rush: In traditional PTO systems, employees often scramble to use their remaining vacation days before they expire at the end of the year. Unlimited PTO eliminates this issue, making planning for time off smoother and more organic.
Con: Uncertainty about usage
- Lack of clarity: With no limitations, people may feel unsure about how much time off is appropriate, leading them to hesitate to take time off out of the fear that “too much” might negatively impact their job security or reputation.
- Fear of judgment: Similarly, people might worry that taking extended or frequent time off could lead to being perceived as less dedicated compared to peers, resulting in people taking less time off than they would under a traditional PTO policy.
Con: Not truly “unlimited”
- Manager discretion: Time off is often still subject to approval, meaning that even though PTO is “unlimited,” people may not always feel free to take it when they want or for as long as they want. High workloads or critical project deadlines might mean time off is delayed or denied.
- Implicit limits: In some cases, even though PTO is described as unlimited, employees may be discouraged (directly or indirectly) from taking more than a certain amount. Companies might informally expect employees to stick to a limit, making it less “unlimited” in practice.
Con: Potential for abuse
- Excessive time off: While the vast majority of employees are responsible, there’s a risk that some may take advantage of the system and take more time off than is reasonable, impacting overall productivity. This can also create resentment among peers and lead to conflicts.
Unlimited PTO Case Study: Netflix
Netflix is a company famous for its perks and benefits, including its unlimited PTO policy, actually called the “No vacation policy.”
In Netflix’s words:
“Our vacation policy is “take vacation” and we actually do. Frankly, we intermix work and personal time quite a bit. Time away works differently at Netflix. We don’t have a prescribed 9-to-5 workday, so we don’t have prescribed time off policies for salaried employees, either. We don’t set a holiday and vacation schedule, so you can observe what’s important to you—including when your mind and body need a break.”
The company intro’d the policy because they already had a flexible working policy and wanted to extend it to vacation too.
In his book “No Rule Rules”, founder and then CEO Reed Hastings describes getting nightmares when he first introduced this policy, for example walking into a completely empty office building.
Luckily, most of these were unfounded and the policy has been successful.
Some initial issues were accountants taking time off during traditional crunch periods causing them to close their books late. Another was a member of the marketing team not taking time off for four years(!) because their team was workaholics and they didn’t want to appear less dedicated.
But these mistakes were learned from and Netflix is one of the most successful and desirable employers in the world.
PTO Best Practices
Interested in implementing unlimited PTO in your organization? Here are some best practices:
1. Establish clear expectations
- Set general guidelines: Although the policy is “unlimited,” it’s essential to set clear expectations about how much time off is reasonable. For example, some companies suggest a minimum number of weeks per year to ensure employees take adequate breaks and/or have a limit on consecutive holidays. Tech company Evernote uses a $1,000 vacation stipend to encourage people to take vacation.
- Ensure business continuity: Encourage employees to plan time off in a way that doesn’t disrupt work, particularly around deadlines or busy periods. Clear communication is essential to avoid conflicts or gaps in coverage.
2. Model behaviors
- Lead by example: Senior leadership should actively take advantage of the policy and encourage and recognize employees for doing the same. This demonstrates that it’s truly acceptable to take time off.
- Promote open communication: Foster an environment where employees feel comfortable discussing their workload and time off with their managers. Managers should check in with employees to ensure they’re managing their workload and personal time appropriately.
4. Train managers to support work-life balance
- Empower managers: Train managers to balance workload distribution while encouraging time off. They should have visibility into their team’s schedules, making it easier to approve PTO requests without compromising business needs.
- Monitor workload and burnout: Equip managers to recognize signs of burnout and encourage their team members to take time off when needed. Managers should track not only productivity but also ensure that their employees are regularly resting and avoiding overwork.
5. Track PTO usage (softly)
- Track trends without strict limits: Although PTO is unlimited, using leave management software to track how much time employees are taking off can help identify patterns, such as employees who aren’t taking enough rest or those who might be overusing the policy. This doesn’t mean imposing restrictions but ensuring well-being and fairness across the organization.
- Review employee feedback: Regularly gather feedback from employees about their experiences with unlimited PTO. Understanding any concerns or discomfort about using the policy can help refine its implementation.
6. Create PTO-friendly periods
- Encourage PTO during downtime: Identify slow periods in the business calendar and encourage employees to take advantage of them for time off. This minimizes the impact on productivity and ensures employees take breaks during less critical times. For example, our parent company BWZ mandates employees take Fridays off in August.
- Avoid peak times: Set reasonable restrictions on taking time off during high-demand periods. Be transparent about blackout periods, such as during critical project deadlines or holiday rushes.
7. Foster a results-oriented culture
- Focus on deliverables, not hours worked: Make sure performance evaluations are based on results rather than hours spent at work. This shift ensures employees don’t feel they need to “prove” their commitment by being present all the time.
- Celebrate achievements, not overworking: Recognize employees for completing tasks and meeting goals, rather than glorifying long hours or constant availability. This encourages a healthier work culture where time off is valued.
8. Offer further wellness support
- Promote mental health days: Encourage employees to take time off when they feel mentally exhausted, even if they don’t need a full vacation. A well-rested employee is more productive and engaged in the long run.
- Provide wellness programs: Complement the unlimited PTO policy with wellness initiatives such as mental health days, gym memberships, or access to counseling services. This further emphasizes the company’s commitment to employee well-being.
7 Common Types Of PTO
As well as unlimited PTO, here are some other PTO types to be aware of:
- Discretionary PTO: Time off granted at the discretion of management, typically based on individual performance or specific needs.
- Floating Holidays: Flexible holidays that employees can take at their discretion, typically used for personal or cultural events not covered by standard holidays.
- Flexible Time Off: A time off policy where employees have flexibility in choosing when to take vacation or personal days, without rigid limitations.
- FTO vs PTO: FTO (Flexible Time Off) typically offers more freedom with fewer restrictions compared to traditional PTO (Paid Time Off), where a set number of days are allocated.
- Paid Holidays: Designated public or company-recognized holidays during which employees receive paid time off without needing to use vacation days.
- Sick Days: Specific days set aside for employees to take time off when they are ill or need medical care, usually paid.
- Unlimited PTO: A policy allowing employees to take as much time off as needed without a set limit, as long as work responsibilities are met.
Editor’s Take: Should You Implement Unlimited PTO?
So, is it worth adding unlimited PTO to your employee benefits strategy?
From my research, most people with the “unlimited” PTO option seem to take around 5-6 weeks per year, so maybe just offering 6-8 weeks of flexible vacation will suffice.
This is generous in the modern world and removes any needless ambiguity for both parties.
If you decide it suits your culture to go for the unlimited option, some companies choose to brand it ‘reasonable’ time off instead to add some guardrails, and be sure to apply the best practices above!
About Finn Bartram
I’ve been on the editorial team of People Managing People since 2021. I predominantly work with subject matter experts in the HR and leadership fields to produce practical and inspiring content for rapidly scaling startups.
I also keep a keen eye on workforce trends such as AI, the aging workforce and 4-day workweek.
This article originally appeared on Peoplemanagingpeople.com and was syndicated by MediaFeed.org
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Could New Cybersecurity Rules Help Build Public Trust in AI?
Last month, the UK Government introduced new regulatory advancements to enhance cybersecurity in AI models and software. Designed to fortify digital systems against hacking and sabotage, these are changes intended to foster confidence in the use of AI across various industries – confidence that is very much needed.
Given the cost of cybercrime is already projected to reach $13.82 trillion by 2028 – and could grow at an even higher rate as the new generation of cybercriminals gain access to increasingly sophisticated AI – trust in the tech is understandably beginning to weaken.
While these new measures represent significant progress in addressing current cybersecurity challenges, there are still questions and concerns around the future adaptability and efficacy of regulatory frameworks, particularly among the developer community.
In a recent survey among developers across both the UK and US, a total of 72% said that regulations made to protect privacy are not built for the future, with 56% believing that dynamic regulatory structures – which are meant to be adaptable to tech advancements – could pose an actual threat. A particularly alarming aspect is the security risk associated with AI systems that require vast datasets for training, which often include sensitive personal information.
With this in mind, changing or inconsistent regulations could create vulnerabilities or gaps in how this sensitive data is protected, increasing the risk of data breaches or misuse.
As regulations evolve, ensuring the security and privacy of the personal information used in AI training looks set to become increasingly difficult, which could lead to severe consequences for both individuals and organisations.
The same survey went on to reveal that 30% of developers believe that there is a general lack of understanding among regulators who are not equipped with the right set of skills to comprehend the technology they’re tasked with regulating.
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With skills and knowledge in question, alongside rapidly advancing AI and cybersecurity threats, what exactly should regulators keep in mind when creating regulatory frameworks that are both adaptable and effective?
It’s my view that, firstly, regulators should know all the options on the table when it comes to possible Privacy-enhancing technologies (PETs). While some PETs are already being utilised to minimise the risk of data breaches, others are evolving as I write, with immense potential in terms of securing sensitive data and protecting privacy. Knowing the advantages and limitations of each helps with a flexible approach in adopting them rather than trying to create one policy to cover all at once.
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Multi-factor authentication (MFA) – commonly integrated by developers into authentication systems to provide an additional layer of security – is used in applications ranging from online banking to enterprise software. Biometric authentication is another advanced and secure method also in use today that utilises unique physical traits such as fingerprints or facial recognition. Additionally, looking ahead, the adoption of federated identity mechanisms, such as FIDO (Fast Identity Online) or OpenID Connect, hold promise. These mechanisms not only enhance security, but also streamline user authentication processes across various platforms, offering a unified and secure approach to identity management.
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This tech provides robust security by ensuring data is encrypted from sender to recipient, preventing unauthorised access even by service providers. However, implementing E2EE can be complex and resource-intensive, often requiring significant computational power and sophisticated key management. Because E2EE prevents service providers from accessing the data, it can also hinder their ability to assist with data recovery or comply with legal requests for information; a situation that could be an issue in cases of criminal investigation or data recovery.
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Although FHE is still considered to be in its early stages of being fully realised, it has made significant advancements in recent years. A type of encryption that supports data processing without requiring decryption, it is a perfect combination between AI and data security, as it allows organisations to wield the power of the technology without compromising privacy expectations for users. For example, FHE can be used by financial institutions to confidentially train fraud detection AI models across banks without exposing any personal data;and healthcare providers can perform predictive diagnostics without exposing the private information of their patients.
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This technology complements FHE by providing an end-user the ability to decrypt encrypted data after checking that he or she has the right to access such data. MPC allows a quorum of designated entities to engage in a collaborative protocol that will reach a consensus on the access control before re-encrypting the data from the public encryption key of the protocol to the public encryption key of the end-user, this granting the end-user access to the clear data. Each entity in the quorum has only a piece of the private decryption key of the protocol and is therefore unable to decrypt any data on its own. Furthermore, the clear data is never made available to anyone but the end-user itself.
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Once regulators have a good – and current – understanding of PETs – of which there are many more – the next step is for policymakers to ensure regulations don’t stifle technological advancement while still protecting against cyber threats.
To craft nuanced and effective privacy policies that evolve alongside technological advancements, it’s key to remember that they don’t operate in a vacuum. They are not expected to be the only ones responsible for this. Instead, policymakers should be working alongside the creators of the technology – who in turn should start designing their tech while keeping existing frameworks in mind rather than expecting new ones to adapt.
Incorporating continuous learning within the organization is also crucial, as well as allowing employees to participate in industry events and conferences in order to be up to speed with the latest developments and meet with experts. Where possible, we should collaborate with the industry, for example, by inviting representatives of tech companies to give internal seminars or demonstrations.
I strongly believe that all of the above should be factored in as we integrate increasingly complex systems like AI, IoT, and advanced data analytics into our daily lives and the potential for cyber threats grows.
By future-proofing regulations, we can ensure that we’re not constantly playing catch-up with cybercriminals but proactively protecting our digital infrastructure. By adopting a dynamic and adaptive regulatory framework, we can better safeguard sensitive data, protect user privacy, and maintain public trust in digital technologies.
About Ghazi Ben Amor
Ghazi Ben Amor is VP, Corporate Development at Zama. He has worked in cybersecurity for more than 20 years, with roles spanning engineering, strategy, investment, and finance. At Zama, he is heading partnerships development, with a focus on cloud providers, hardware accelerators, and financial institutions.
This article originally appeared on TheCTOClub.com and was syndicated by MediaFeed.org.
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Featured Image Credit: JLco – Julia Amaral/Istockphoto.
