Article: Unlimited paid time off– A fantasy or reality?

Employee Relations

Unlimited paid time off– A fantasy or reality?

How to manage work with time off, to organize work time with leave time? Is leave anytime with target fulfillment policy better than availing of paid time off at the end of the year?
Unlimited paid time off– A fantasy or reality?

Imagine a scenario wherein you don’t have an upper limit on the number of days you can take time off, where you are free to take any number of days off and will still be paid for it, sounds like a fantasy doesn’t it? Well believe it or not as per SHRM’s research 1% employers worldwide offer this liberty to their employees. Some of the firms to practice this as a formal policy are Netflix and Virgin group.

Both Netflix and Virgin group believe in the philosophy of giving their employees power to decide when and how much time off they need. The idea here is to not take your work for a ride but to take as much leave you to choose to take as long as you get the job done. The focus is on results rather than ensuring that employees complete their stipulated number of hours in the office.

A study by Neilson group suggests that employees who go on vacations are more satisfied with their jobs, more involved and less likely to burn out and quit as compared to the employees who hardly take any time off.

Advantages of unlimited PTO:

1.    Ownership feeling – By giving employees this choice, the company demonstrates trust on employees’ judgment, thus giving employees a feeling of ownership towards the company. They themselves feel responsible towards the organization.

2.    Good Selling point – This policy can serve as a good selling point for potential hires. A 2012 survey by Ask.com of 2094 employees showed that 69%employees would be more inclined to take a job that offers unlimited paid vacation.

3.    Financial Benefit – Most employees use their earned leave balance as a saving by accruing the earned leave balance and encashing it at the end of the year. With unlimited PTO the company will end up saving huge amounts of money which would otherwise be spent on encashing employee earned leaves.

4.    More engaged workforce – With no risk of earned leaves expiring at the end of the year, employees will not be in a rush to utilize these leaves and will be able to decide the duration and placement of leaves, making the leave policy more flexible and engaging the workforce.

 Can all companies adopt this?

In my opinion, a lot depends on the following factors before deciding if your organization is ready for this kind of a flexible leave policy:

1.    Nature of work – Some jobs may require a certain amount of facetime or physical presence, while others can be done remotely. – An example is of Human Resources – most employees would like to meet their HR in person rather than just talking to someone over mail/call for an indefinite amount of time.

2.    Maturity of the workforce- The age mix and the maturity level of the workforce is a major deciding factor too. No organization would want that its employees to misuse this flexibility. While it may be appealing to the “Work hard party harder “millennials, it may not be so appealing to the older folks who may see it as a loss of their “Uncashed cheques.”

3.    Lay out the rules – The most imperative aspect is for the organisation to list out the rules very clearly and define it as a formal policy containing details of how much maximum leave can be taken in one go, how much advance notice will need to be provided,during which times this policy cannot be availed e.g. in the middle of project deliveries etc. and lastly, listing out the consequences of misuse of this policy.

Closing word 

Many start-ups and organizations that are not bound by the traditional 9-5 pm kind of setup, have been able to deploy this successfully.However, they succeeded only because they did their homework instead of deploying a half-baked vague policy.

In the Indian scenario, we may be behind getting comfortable with such kind of freedom, but don’t you think it’s high time we prioritize our lives over work from time to time? After all, “All work and no play makes Jack a dull boy!”

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Topics: Employee Relations, Life @ Work

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