When a product or service has a feature set that differentiates itself from the competition, we call this a “delighter”. Over time, per the Kano model, things that were delighters gain mass adoption by competitors and customers come to expect these feature sets — ergo they are “must haves”.
When it comes to distinguishing your perks in the tech industry, this is no different. In the mid 2010s Unlimited PTO began popping up at all the hot shot tech companies and now in 2021 it’s become an expectation.
“It doesn’t make sense to hire smart people and then tell them what to to , We hire smart people so they can tell us what to do.” — Steve Jobs
When it comes to building a team in tech, we look for highly motivated code artisans who pour themselves into their work. Hiring them and immediately telling them how to spend their time makes absolutely no sense. Putting a hard limit on the amount of time you need to take for yourself or your team is a relic of the 20th century and doesn’t make sense in a hyper-connected field like tech.
Now you’re probably thinking — “gee thats a bold statement, even Amazon has a limited PTO so unlimited must have some complications”, and you’re not wrong. There are credible concerns with an unlimited PTO policy and a root cause analysis on any one of these will always reveal something deeper than lazy employees taking 6 months paid off to a remote island.
Here’s a few thoughts on why you must have unlimited PTO, some counter arguments that were considered and some thoughts for how to get the most out of your unlimited PTO policy to supercharge your employees and your business.
Unlimited PTO Fights Burnout
Giving space for employees to take a no questions asked mental health day is one of the most underrated benefits you can give. Deteriorating mental health of your staff is the number one cause of burnout which leads to brain drain.
Misery loves company, and employees who are not in the right headspace to be fully present at work is a major drag on the rest of the team. Someone who is constantly down or distracted can bring the mood down for the whole team and shift focus away from what matters to your business.
Unlimited PTO is a Physical Health Benefit Too
Also when you’re not counting sick days & PTO days, people will actually stay home when sick, rather than forcing themselves into the office with a contagious virus so as not to “waste a vacation/sick day” that could otherwise be used for when they are “actually sick”.
People showing up tired or hopped up on cough syrup are just as inattentive as people showing up drunk and just about as productive. Forcing people to work through an illness prolongs the illness as well as increases the odds that your other employees will get sick if you also insist on an on-site presence. Just take the day off and watch The Price is Right with some Ginger Ale without dipping into your plans for Fiji.
Unlimited PTO Has Some Financial Benefit Too
When employees are encouraged to take as much time as they need for themselves, they’re no longer weight PTO accounts in decisions like going to the doctor for preventative care, taking mental health days, or booking a few days to train for a marathon. That also means people are healthier and happier which translates to indirect cost reduction on company health insurance.
Not only are people filing less claims against the company health insurance, your HR staff can now spend less time bean counting vacation days and more time recruiting, onboarding, and making your company a great place to thrive.
Some Counter Arguments
Well how should I reward employees for staying late or going above & beyond?
Pay them more or don’t put them in positions where they have to work late all the time. 🤷♀
But with all that PTO people might be more inclined to take days off to interview.
If you’re really worried about that you have bigger problems.
But if there’s no PTO limit employees will just take large swaths of time off!
False! Generally speaking companies who have unlimited PTO tend to observe employees take less than 2 weeks per calendar year. At my company, we surveyed our engineering org and found the average time taken by an engineer was 8 days (2 days less than what most companies give) and that was with several healthy outliers (mostly from my group) each taking 4 weeks a year. Besides, if you’re that concerned your employees are going to cheat you, you need to do a better job hiring.
Hold on, you just countered the pro unlimited PTO argument 😏
Exactly, as I acknowledged, unlimited PTO isn’t perfect but it starts at your company culture which starts with trust. Which leads to our final part…
Some Complications and How to Fix Them
People feel pressured to not use PTO and take less
Let’s dig into this. Yes software engineers pour themselves into their craft. Getting stuck on a bug can be one of those things that eats away at you and you’re up all night trying to solve it. Thats one aspect of it. The other aspect is culture.
Have you built a culture that rewards diversity of thought, trust, and empathy? Or is your culture a hyper-competitive shark tank where you stack rank employees based on number of tickets completed? Do employees feel like they’ll get fired at a moments notice because you don’t create clarity around expectations? Are you the CEO taking time off to center yourself or are you working yourself into a nub and killing your culture without knowing it?
People don’t take PTO because they feel they can’t trust the leadership to actually let them have the unlimited PTO. Trust is the foundation of a great culture (if you follow me this shouldn’t be a new thing for you 😉). You can establish trust and get your people to take more than the standard 2 weeks by doing some of the following:
- Take a 2 week minimum yourself as CEO and encourage your staff to do the same.
- Start a Slack channel where people can share their vacation photos and recommend travel plans. Build a culture around that — its a great motivator for people to stick with your group.
- Enforce a 2 week minimum and make sure your managers are actively encouraging people to take their vacations if they aren’t already.
- Be vulnerable and take mental health days and let people know you’re taking a “me day” to get your head straight. I have yet to meet anyone who will fault you for it.
People abuse the system
This is actually pretty rare and if it is a problem, the problem isn’t in the PTO and you shouldn’t punish the whole staff for a bad hire. Instead, consider their performance, ask them why they’re taking so much PTO and if there’s anything you can do to help. If they’re actively blowing you off, then fire them and look at the hiring process that brought them in. Are you looking for the right characteristics? Were there any warning signs that you can use to see this coming next time?
Bringing it Home
We covered a few of the benefits of an unlimited PTO policy, considered some of the counter arguments, and uncovered that the root cause of anything wrong with a policy comes down to trust and culture. If you don’t trust your staff, you’re hiring wrong or need to change your mindset. If your staff doesn’t trust you, you need to be more transparent, visible, and predictable. Neither PTO policy will work well in a dysfunctional organization.
Unlimited PTO is 100% a must have for tech and some other industries as well, especially considering the benefits to your staff, your company, and even yourself as a leader. Don’t get caught up doing the same thing over and over just because it worked in the 2000s, listen to your staff and the industry trend at large.