Balancing Unlimited PTO and Annual Vacation Time


As an industry-leading payroll and benefits administration provider for many years, BenefitMall has seen plenty of changes in how employers compensate their workers through salary and benefits. One of the more recent changes is a trend toward eliminating traditional sick days, personal days, and vacation time and replacing it with unlimited paid time off (PTO).

The unlimited PTO model is seen as a way to provide the same benefits as the older model without all the hassles that come with trying to track the different kinds of paid time employees can take advantage of. Unlimited PTO is also seen as a way to motivate employees to be better and more efficient at what they do. As long as they get their work done on schedule and according to company standards, they have the freedom to come and go as they please.

Unfortunately, the unlimited PTO model comes with a difficult challenge: scheduling annual vacation time without short staffing the office. Having to be a bit more picky about vacation time doesn’t necessarily work well with the unlimited PTO mindset.

Establishing Clear Policies

BenefitMall says that the first step in eliminating confusion is to establish clear policies. Remember that an unlimited PTO plan doesn’t have to be a free-for-all. There can and should be reasonable constraints in place. Employers run into trouble when they offer unlimited PTO with no such constraints to lean on when necessary.

For example, a company could offer truly unlimited PTO for most of the year but rein employees in during the busy vacation season. A clear policy that outlines how vacation time can be taken goes a long way toward keeping staff numbers in check.

Establishing Set Procedures

Along with clear policies, equally clear procedures for scheduling vacation time are needed. Again, this may fly in the face of the whole unlimited PTO concept, but it is a necessary evil when a company is facing staffing shortages. Establishing a set procedure forces all workers to go through the same channels so that management can better control scheduling.

Communicating with Employees

Though there are some exceptions to the rule, employers with unlimited PTO benefits do not just allow employees to take time away without at least letting someone know. Why? Because communication is critical to a smooth functioning office. Employers can utilize their normal communication channels to make sure employees know the importance of maintaining adequate staffing levels.

If one of the points off unlimited PTO is to give employees a sense of ownership over their jobs and tasks, employers should tap into that ownership by helping employees understand that short staffing the office is bad for business. Once they know how problematic vacation time is, they should be more willing to effectively communicate among themselves to ensure that not everyone wants to take vacation at the same time.

Track Vacation Time

Finally, one of the benefits of unlimited PTO from the HR department’s perspective is not having to track time off nearly as diligently as is necessary with a more traditional model. But vacation time could be the one exception here. Tracking time employees take for vacation makes it easier to understand when the most critical times of the year are.

Unlimited PTO is a benefit catching on with more companies. But it is not without its drawbacks. During the busy vacation season, the biggest drawback of unlimited PTO is short staffing the office. But with the right policies and procedures in place, effective communication, and solid tracking practices, staffing shortages can be mitigated without undermining the nature of unlimited PTO.