Unlimited Paid Time Off for Startups: Pros and Cons

Startup culture brought along many amazing things and changed how we see work completely. We have officially said our goodbyes to standard 9 to 5 working hours. We traded business suits for jeans and t-shirts. Even Fridays at work are easier to bear thanks to happy Fridays.

We can see how much startup culture has changed us even in the way how we take our vacations and days off. Everything revolves around retaining good workers, and we cannot agree more with this attitude. The happy worker brings much-needed profit to the company and enables it to grow and outstand itself in the long run. If your startup needs just a little push to excel maybe, you should consider implementing unlimited paid time off. Don’t be scared, it might actually benefit your budget. In this article, we’re going to discuss in detail what are the pros and cons of unlimited PTO policy, so just read on.

Unlimited paid time off actually saves the money

When it comes to startups, it all comes down to proper budgeting. That’s why you might be a bit cautious when you hear the words unlimited paid time off. However, how much it sounded impossible it is proven that companies with this policy are facing a whole different problem. They actually cannot make their employees take enough time off as they should. Yep, you’ve heard it right. Employees with unlimited paid time off actually take less time off than their restricted counterparts.

However, time can be a problem

The main thing that differentiates startups from middle-sized companies and corporations is the speed of doing business. In a startup, everything changes pretty fast, sometimes huge changes can happen overnight. And that might be a deal breaker when it comes to implementing an unlimited paid time off policy. In a startup environment, everybody needs to be ready to react fast. However, how can you expect such a thing when you let them have unlimited paid time off?

There’s a solution for that as well

… you don’t need to give up on the PTO policy idea yet. As we mentioned before in many articles we wrote about efficient management it’s all in communication. Before you actually go ahead with implementing unlimited paid time off for your workers be sure everyone’s on the same page and you’ve set the ground rules. Remember, everything is doable if there’s a good communication base to start with.

However, the PTO policy is not fair sometimes

And that’s especially true for one-man teams. Startups in the beginning often can afford only one person who’s usually in charge of one aspect of its functioning. That’s why you might burden your only salesperson, marketing manager, and designer to come sooner from their vacation because nobody actually does their part of the job. And sometimes all of us need to take longer breaks to recharge truly.

Unlimited paid time off actually boosts employee engagement

A hot topic among business owners, no matter the size of their business is how to retain good workers. It actually costs a lot to replace a worker, and it can impact your business plan significantly. Implementing an Unlimited PTO policy is a great way to retain good workers and boost their engagement because they appreciate the freedom they have and are eager to give back to the company that treats them well.

However, it might be abused

Like with everything, even the most open-minded companies are confronted with the abuse of their rules. Theirs is a fight in the world happening right now, and it involves sick leave abuse. Don’t get discouraged, this is just a symptom and not a disease. Make sure to talk with the ones who are trying to use the privilege they have.

Did you know that unlimited paid time off actually builds trust?

And that’s a major. We bet we cannot find a person who doesn’t like to work for an employer who values its workers and trust them completely. By implementing an Unlimited PTO policy, you’re actually sending a big message to your employees. It means that you believe them entirely and that you value their work. You are actually showing them you appreciate what they actually do, instead of them just being there. Through this, they will be more engaged in what they do, and they will actually be more productive than the contrary.

An unlimited PTO policy is actually perfect for startups

We already mentioned how fast things may change in a startup. That’s why sometimes your employees need to work around the clock to improve or fix something. However, doing business at that tempo is not something that’s sustainable in the long run. Actually, researchers have shown that employees who are continually working 40 or more hours per week are way less productive than the ones who are doing it infrequently. That’s why unlimited paid time off is a perfect solution for your employee’s extra work.

But, be aware of falling into a black hole of PTO policy

We are mentioning this over and over again. Great ideas can end up in total disaster if they are not implemented carefully. And the stepping stone for most of the things poorly gone at work (or actually in everyday life) is miscommunication. To really make PTO policy work sure you’ve set the ground rules carefully and in detail and that you have them in written form and send them out to your employees. Be patient even if the people need some extra clarification, it takes time to make something work.

And be aware of burnouts

There are clear signs you’re heading for burnout you just cannot deny. Given that with the PTO policy employees end up taking less time off than the ones who are working in a workplace with more traditional policies, they might be at risk of burnout. It’s a serious thing that shouldn’t be ignored. Burnout workers can actually cost a company a lot of money, and you should be careful that everyone takes much-needed time off even with an unlimited PTO policy.

With unlimited paid time off you give space to your employees

… by letting them be completely honest about the reasons for their taking time off. Sometimes it’s hard for the ones working 9 to 5 jobs to finish their personal chores and if the management is unable to give them the freedom to complete them, they will end up calling in sick. With the unlimited paid time off you are letting your employees finish some outside-of-work stuff without feeling guilty or pressured to lie. On top of that, you won’t feel their resentment for your rigid management rules and earn some additional respect. People are always more happy to work for someone who gives them freedom, even if that means they need to go on a 2-hour break to finish something. When you set the rules like that you will know for sure they will do their part of the job with enthusiasm and effort.

When you put the pros and cons together

You might have found the reasons to implement an unlimited PTO policy as off now while reading our article. Or, you decided to give up on this idea. Whatever the case is, it’s crucial for you to really understand what can be the stepping stones for your business and where can you profit. In the end, not every business is different, and not everyone will find the PTO policy working. Whatever the case is, be sure to think it through and follow the tips for how to successfully implement an unlimited PTO policy if you decide for it.

Ana Mladenovic

A cat enthusiast and a cupcake maniac, Ana is a freelance Content Writer passionate about HR, productivity, and team management topics. When she’s not at her keyboard, you can find Ana in the kitchen, trying to make delicious cookies.