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Employees allowed to take off as much time as they would like end up taking fewer days off compared with those who are given a set number of days per year, acco

Employees allowed to take off as much time as they would like end up taking fewer days off compared with those who are given a set number of days per year, according to a 2017 survey by HR platform Namely. Which was the precise intent of the policy from the very start.

1123581321 4y ago
I recall otherwise. Early adopters of unlimited PTO tended to be progressive companies interested in employee welfare. Often attracting people from companies only offering 5-10 days PTO and restricting sick and personal days to a separate pool. Since then, it’s more common for more fixed PTO days to be offered and not to allow flexible workweeks rather than use personal hours, so more PTO can be used for vacation.
- lisasays 4y ago
  Then why not just offer 15-25 days of explicit vacation? That you can, you know, actually use? Like a decent, healthy, civilized company. That doesn't try to mess with its employees heads (quite so blatantly and needlessly).
  - 1123581321 4y ago
    Sure. I'm just talking about the origin of the unlimited PTO trend since you said the origins were about convincing people to use less PTO. There are a lot more companies offering generous fixed PTO now, and that was partly to compete with unlimited.
  - bluefirebrand 4y ago
    In some places if you have vacation days in your contract then the company is required to pay you out remaining days that you left unused. It winds up being cheaper for them to offer Unlimited Days* because then they don't pay out un-taken days. * Subject to manager approval of course. I strongly suspect there is still a target number of days allowed for each employee based on their place in the org, and requests for days past that number will usually be denied unless there are extenuating circumstances.
    - prepend 4y ago
      Exactly, that's why companies offer unlimited rather than a generous amount. I worked for a firm that gave 30 days of PTO a year (in addition to holidays and whatnot). They budgeted it as an expense and planned accordingly. It would be interesting to see what "unlimited" vacation giving firms budget and plan for as a liability. If the goal is high employee morale, then they should budget and plan a very high amount. If the goal is to "benefit signal" to pretend they have good benefits, then they will only budget a low amount.
      - cyanydeez 4y ago
        They plan zero. Unlimited PTo relies on the rest of the business processes to regulate behavior. For consultants, %. Billable will dictate your unlimited PTO. for widget making, quotas will work. For project assignments, expect tighter deadlines. Company culture will dictate usage and accounting gets to remove the liability.
      - dragonwriter 4y ago
        > It would be interesting to see what "unlimited" vacation giving firms budget and plan for as a liability. “Unlimited” (=non-accruable) PTO isn’t a liability, that’s (from the firm’s perspective) the whole point of using it.
    - markus92 4y ago
      Yup. Changing jobs and I’m expecting to get 400 accrued hours paid out from my previous job.
      - thfuran 4y ago
        Have you never taken a vacation?
        markus92 4y ago
        Of course I have, but not a whole lot. 6 weeks a year builds up over five years.
  - coldtea 4y ago
    Even better, why not offer unlimited vacation combined with a set minimum number of, say, 25 days vacation everybody should take?
    - cyanydeez 4y ago
      My place switched to unlimited, when pressed they stated you're required to take 10 days. Prior to this, they had seniority up to 20 days based on number of year. This was absolutely about removing liability from their books. And sold purely as a "look how ESG we are"
      - coldtea 4y ago
        The law should kill the seniority thing for vacation days too. Perhaps make them stick for a year (to avoid somebody being hired and then living after 6 months 20 days of which are paid vacations), but then everybody should be offered the same number of days to take annually. After all they've worked for the same number of days in that year as any older employee too.
        anonymouskimmer 4y ago
        And some of those newer employees are older (in age) than younger employees with greater seniority.
  - cyanydeez 4y ago
    If you're a consultant, it's basically a meaningless offer as you're still X% billable. If there's some other can ncrete metric, infinite PTO just means whoever already has their privileged position.
kbelder 4y ago
I think that was just a side benefit. The main reason is that vacation days are an accounting liability; six-eight weeks per employee is a lot of money, and they company isn't fully in control of when they have to pay it out. If employees took just as many days off with unlimited vacation time, it would still be a win, because those days don't accrue.
yumraj 4y ago
AFAIK accrued PTO sits on the books of the companies as a liability (or expense or whatever) since they have to pay for it when the employee leaves/is terminated. Unlimited PTO doesn’t accrue and hence does not show on the books. That IMHO is the primary benefit to the companies.
- cyanydeez 4y ago
  Right, that's exactly what I saw when my company did this. If people saw the loss of guaranteed benefits to something entirely in the companies benefit, I heard nothing. HR sold it like we were gaining something. The people who gained the most were managers without specific output. Imagine you accrue enough portfolios, and now your set.
theGnuMe 4y ago
It’s that and the cash liability.
noloblo 4y ago
unpaywall archive link: https://archive.is/20230421233838/https://www.ft.com/content/10493dfb-ed99-49e0-b4d1-4b9c5004e453 https://archive.is/20230421233838/https://www.ft.com/content...

1123581321 4y ago

I recall otherwise. Early adopters of unlimited PTO tended to be progressive companies interested in employee welfare. Often attracting people from companies only offering 5-10 days PTO and restricting sick and personal days to a separate pool. Since then, it’s more common for more fixed PTO days to be offered and not to allow flexible workweeks rather than use personal hours, so more PTO can be used for vacation.

lisasays 4y ago
Then why not just offer 15-25 days of explicit vacation? That you can, you know, actually use? Like a decent, healthy, civilized company. That doesn't try to mess with its employees heads (quite so blatantly and needlessly).
- 1123581321 4y ago
  Sure. I'm just talking about the origin of the unlimited PTO trend since you said the origins were about convincing people to use less PTO. There are a lot more companies offering generous fixed PTO now, and that was partly to compete with unlimited.
- bluefirebrand 4y ago
  In some places if you have vacation days in your contract then the company is required to pay you out remaining days that you left unused. It winds up being cheaper for them to offer Unlimited Days* because then they don't pay out un-taken days. * Subject to manager approval of course. I strongly suspect there is still a target number of days allowed for each employee based on their place in the org, and requests for days past that number will usually be denied unless there are extenuating circumstances.
  - prepend 4y ago
    Exactly, that's why companies offer unlimited rather than a generous amount. I worked for a firm that gave 30 days of PTO a year (in addition to holidays and whatnot). They budgeted it as an expense and planned accordingly. It would be interesting to see what "unlimited" vacation giving firms budget and plan for as a liability. If the goal is high employee morale, then they should budget and plan a very high amount. If the goal is to "benefit signal" to pretend they have good benefits, then they will only budget a low amount.
    - cyanydeez 4y ago
      They plan zero. Unlimited PTo relies on the rest of the business processes to regulate behavior. For consultants, %. Billable will dictate your unlimited PTO. for widget making, quotas will work. For project assignments, expect tighter deadlines. Company culture will dictate usage and accounting gets to remove the liability.
    - dragonwriter 4y ago
      > It would be interesting to see what "unlimited" vacation giving firms budget and plan for as a liability. “Unlimited” (=non-accruable) PTO isn’t a liability, that’s (from the firm’s perspective) the whole point of using it.
  - markus92 4y ago
    Yup. Changing jobs and I’m expecting to get 400 accrued hours paid out from my previous job.
    - thfuran 4y ago
      Have you never taken a vacation?
      - markus92 4y ago
        Of course I have, but not a whole lot. 6 weeks a year builds up over five years.
- coldtea 4y ago
  Even better, why not offer unlimited vacation combined with a set minimum number of, say, 25 days vacation everybody should take?
  - cyanydeez 4y ago
    My place switched to unlimited, when pressed they stated you're required to take 10 days. Prior to this, they had seniority up to 20 days based on number of year. This was absolutely about removing liability from their books. And sold purely as a "look how ESG we are"
    - coldtea 4y ago
      The law should kill the seniority thing for vacation days too. Perhaps make them stick for a year (to avoid somebody being hired and then living after 6 months 20 days of which are paid vacations), but then everybody should be offered the same number of days to take annually. After all they've worked for the same number of days in that year as any older employee too.
      - anonymouskimmer 4y ago
        And some of those newer employees are older (in age) than younger employees with greater seniority.
- cyanydeez 4y ago
  If you're a consultant, it's basically a meaningless offer as you're still X% billable. If there's some other can ncrete metric, infinite PTO just means whoever already has their privileged position.

kbelder 4y ago

I think that was just a side benefit. The main reason is that vacation days are an accounting liability; six-eight weeks per employee is a lot of money, and they company isn't fully in control of when they have to pay it out. If employees took just as many days off with unlimited vacation time, it would still be a win, because those days don't accrue.

yumraj 4y ago

AFAIK accrued PTO sits on the books of the companies as a liability (or expense or whatever) since they have to pay for it when the employee leaves/is terminated. Unlimited PTO doesn’t accrue and hence does not show on the books. That IMHO is the primary benefit to the companies.

cyanydeez 4y ago
Right, that's exactly what I saw when my company did this. If people saw the loss of guaranteed benefits to something entirely in the companies benefit, I heard nothing. HR sold it like we were gaining something. The people who gained the most were managers without specific output. Imagine you accrue enough portfolios, and now your set.

theGnuMe 4y ago

It’s that and the cash liability.

noloblo 4y ago

unpaywall archive link: https://archive.is/20230421233838/https://www.ft.com/content/10493dfb-ed99-49e0-b4d1-4b9c5004e453 https://archive.is/20230421233838/https://www.ft.com/content...