“There are countless things I did in the early years of running my company which I now look back on with more than a little embarrassment,” wrote Chelsea Fagan, founder of finance blog The Financial Diet, on LinkedIn earlier this month. “And one of the most clear-cut that I can identify [was having] unlimited PTO as one of our employee benefits.”
The choice, she wrote, led to a race to the bottom: Once vacation time was plentiful, nobody seemed to take it. Employees actually began working more. The policy, Fagan concluded, was just superficially progressive: It didn’t lead to better work-life boundaries. So the team scrapped it.
To those who’ve observed the rise of the unlimited time off policy, this critique may sound counter-intuitive. But it’s part of a shifting tide against limitless vacation.
Unlimited time off policies were once hailed as a beacon of balance: By lifting restrictions on how much time workers can take away from the job, companies could telegraph real trust in their employees, offer more flexibility for rest and recharge, and show how they value well-being at work.
As of late, though, a new view of unlimited PTO has emerged. Take this example: When Goldman Sachs—known for a culture of long days and hundred-hour weeks—announced a new policy of unlimited time off for senior staffers last spring, critics were quick to question its intent. “Goldman’s Move to Unlimited Vacation Is Good for … Goldman,” wrote the New York Times, pointing how no unused days means no need to pay them out later. Others cited evidence, like Fagan’s experience, that limit-free policies discourage staff from taking time off.
In the interim, unlimited policies have been named vacation-deterring, worker-burning, a scam, and the stuff of smoke and mirrors. So how did a well-intentioned benefit go south—and is there a way to course-correct to make it work?
A BRIEF HISTORY OF THE UNINTERRUPTIBLE VACATION
Unlimited time off policies originated among law firms, whose notoriously long hours offered autonomy to overworked attorneys. And their profile rose when Netflix adopted the practice in 2003.
From there, unlimited time made its way into other workplaces, especially in tech, finance, and digital media. One US News survey of these large companies found that 20% of them held unrestricted vacation policies. (That tracks with this writer’s own experience, too—every media company I’ve worked for has given me unlimited time.)
Now the perk is slowly growing with companies across sectors. In a competitive job market, unlimited time off helps a workplace signal that it values flexibility and balance—and is an effective recruiting tool, too, since the concept is popular with workers (pdf).
But unlimited vacation also pays off for employers in dollars and cents. When you don’t promise your workers a set number of vacation days, you don’t have to pay unused days out when they exit, nor carry them into the next calendar year. Critics pinpoint these benefits as a hallmark of hollow progressivism, or a virtue signal for better balance while companies bag the cost-benefit.
DEBUNKING THE DATA
When we talk about the shortcomings of unlimited time off, observers often point to one well-cited study: In 2017, HR platform Namely found that US employees with unlimited PTO actually take less time off than those whose days are numbered—with an average of 13 vacation days for the limitless, compared to 15 days with firm PTO parameters.
But in a 2022 follow-up, Namely found a new trendline. While the gap between workers with unlimited PTO and fixed PTO had narrowed, employees took fewer vacation days overall, regardless of the time off policy their company had in place. Wider adoption of unlimited policies, clearly, weren’t enough to reverse course.
FINDING NEW FIXES
While unlimited paid time policies may be admirable in their aim, they’re falling short. But we don’t have to scrap the whole practice. There are ways we can supplement unlimited PTO so it fulfills its promises—and make sure everyone gets a break.
Ballpark numbers for everyone. Unlimited vacation policies fail when workers don’t have parameters for a reasonable number of days off. But managers can quash uncertainty by giving guidelines (and generously). One of the best things my first manager at Quartz did for me was provide a time-off suggestion while I was onboarding. “We have an unlimited vacation policy,” he told me, “so I aim for five days a quarter.” Now I count my days against the metric—and take another day or two when I realize I’m behind.
Establish time-off minimums. Companies should also issue org-wide guidance on how much time off employees should take. For example, Namely advocates that companies with unlimited leave also establish a minimum requirement for employees. Remember the Goldman Sachs policy that drew criticism? It also included a three-week minimum for vacations, including at least one week of consecutive time, starting this year.
Consider coordinated company vacations. Once they make it to vacation, plenty of people still find it difficult to unplug. To really value time away from work, orgs should consider company-wide time off. These policies shut down operations for all employees on the same day or week so that everyone can log off at once. Companies like LinkedIn, Mozilla, PwC, Bristol Myers Squibb, and more have turned to organization-wide vacations.
If all else fails, make your PTO plan. If you’re an employee with an unlimited time off policy, you can also avoid the no-time-off trap. You might be familiar with the SMART framework—which stands for Specific, Measurable, Achievable, Realistic, and Time-Bound—for goal-setting. So use it to add the parameters that an unlimited policy lacks.
Instead of a hazy goal like, “I’d like to take more time off this year than last year,” inject it with SMART specificity: Maybe you’d like to take 17 planned vacation days this year, with half of them dedicated to a longer trip in the summer, and set them all on the calendar by March. With more intention-setting, we can all set that OOO in peace.
SKY’S THE LIMIT
Beyond time off the clock, how does your company prioritize its remote workers? Submit your company by April 14th and see if they’ll make the ranking in Quartz’s Best Companies for Remote Workers 2023. GitLab, Andela, and ClickUp are among the 83 companies that made it on the list last year.
MORE STORIES FOR TIME-BANKING
💡 The benefit that remote employees need most
🏖 The case for a week-long, company-wide vacation
🚧 How to set healthy boundaries at work
🪜 How time became money—and what it should be instead
💼 Does your team need a meeting reset?
YOU GOT THE MEMO
Send questions, comments, and stories of time-tackling to firstname.lastname@example.org. This edition of The Memo was written by Gabriela Riccardi and edited by Anna Oakes.