Would unlimited PTO policy work at your firm?

Just like many of your peers, Goldman Sachs felt like it had to do something big to retain top Finance talent. In its case, it was offering unlimited PTO for senior employees, and adding two days off each year for junior employees.

A company memo announcing the paid time off (PTO) moves by the high-profile Wall Street investment banker made headlines because it signals a major culture shift, especially concerning reportedly grueling workloads for some of its employees.

At first, it may sound like an operations nightmare that too many employees would abuse. In fact, a survey that involved more than 4,200 U.S. respondents by compensation management software company Payscale found that just 13% of employers have unlimited PTO. Pre-pandemic, that number was 11%.

4 upsides to unlimited PTO

According to talent management software provider Eightfold.ai, here are some of the pros of unlimited PTO that may have influenced the companies in that survey.

1. It can reduce the administrative burden involved with tracking time off, including calculating how much unused PTO carries over into a new year.
2. Employees no longer accrue time off, so you don’t have to pay out unused time at the end of the year or the end of employment.
3. It show employees that you trust them to manage their time off. A culture of trust can lead to improved morale and productivity.
4. It’s a recruitment and marketing tool. Offering unlimited PTO can be a competitive edge because potential employees and others outside the organization will see that you highly value your employees.

For unlimited PTO or any other employee-friendly perks that you’re considering to keep the Great Resignation at bay – such as a four-day workweek, “no-meeting” Wednesdays or a more casual dress code, it’s important to have a clear written policy.

For example, necessary restrictions must be well thought out. It’s smart to spell out staffing coverage requirements for all teams, particularly during their busiest time of year.