Unlimited PTO is an increasingly popular program where team members no longer have a set number of days off per year. Instead, they are trusted to manage their projects and workload on their own terms and take time off when needed, and for the most part, at the time of their choosing. While shifting to unlimited PTO requires an adjustment of your procedures and policies, it's not that different from the flexibility many firms are already offering their employees today.
(Sneak peek - almost one-fifth of participants in our 2022 ConvergenceCoaching® Anytime, Anywhere Work™ Survey indicated that they offer Unlimited PTO to their team members).
What is Unlimited PTO?
Unlimited PTO programs emphasize a culture of flexibility built on personal responsibility and mutual trust, and essentially the message to your people is "meet your work and production goals, finish your projects, and we don't care when you take time off".
Let's take the example of the team member who crushes it one week, working 65 hours to finish reviewing a series of client deliverables and getting the monthly audit schedule published. The next week, this same team member has a dentist appointment during the work day on Monday and leaves early on Thursday for hockey practice. As a result of these personal commitments, this person only puts in 36 hours into the system. Under a traditional PTO model, they would be asked to enter 4 hours of PTO for those two events, regardless of their extra effort the prior week.
Or how about the employee who has a three-week bank of PTO available to her. She has planned a two week fall vacation with her family, and has used the other week by the end of July. She tells her family that because she's already scheduled her full three weeks, she won't be able to take an extra two days at Thanksgiving, even though she's ahead of her realizable revenue goals and other metrics. She feels like there should be a way to have the time off with her family but the firm's policies don't allow her that flexibility.
In both cases, instead of being treated like a professional, empowered to integrate their life with their work, these team members feel like they are being "nickel and dimed" about their time.
Why consider Unlimited PTO?
While improving the morale of your people and empowering them to manage their own schedules, there can also be an attractive financial benefit for your firm in eliminating PTO. When you stop accruing and tracking PTO, you will ultimately experience a reduction of a pretty sizable accrued liability. In addition, firms spend so much time administering PTO accruals - tracking them, monitoring timesheets and employee accrual balances, and encouraging team members to burn PTO to keep accruals in check. Upon the creation of an Unlimited PTO program, the firm can regain the administrative time which can be repurposed for more meaningful HR efforts.
Another advantage of an unlimited PTO program is the goodwill it creates in teams, where you trust your people to meet their production goals, hit their metrics for the year, bring in the amount of agreed upon business, and achieve whatever other expectations have been established for them. In essence, you treat your people like professionals. Many firms find that unlimited PTO programs create more committed team members with a passion for the firm (and in turn, the firm's clients!)
If you are already offering high levels of flexibility to your team members…if your leaders are less focused on using “face time” to measure an employee’s success…if your firm is doing a great job setting clear expectations... and in situations where there is poor performance, the matter is being managed…then you might be a candidate for an unlimited PTO program.
There are some specific issues that you’ll want to consider when transitioning to an unlimited PTO program. First, these programs are on the leading edge of new HR policy and law, so we recommend that you run your program plans by your firm’s labor attorney and that you call any unlimited PTO program a pilot when initially launched, to allow for changes as you learn.
Firms that convert to an unlimited PTO program need to strategize on how to manage their existing PTO accrual. In some cases, team members have stored up PTO with the expectation to have it paid out, either upon leaving the firm, or when they don’t have time to use it, and they might be disappointed to feel they are losing something. Carefully plan how you will position the transition. Options include paying out all or part of accrued vacation (and all at once or over time) or dissolving existing accruals and replacing those benefits with the new unlimited program. Care should be taken when planning the transition to ensure the team doesn’t feel they are left with fewer benefits rather than more while balancing the financial impact of the accruals. For that reason, many firms make the transition at year-end, at the “use or lose” point of their program, so unused PTO that “expires” can roll off and any left can be potentially paid out.
Your policy should clearly state that FMLA, short-term or long-term disability and other similar leave of absence events are distinct and separate and will not be managed through the unlimited PTO program. Firms that offer special leaves of absence like sabbaticals, military leave, parental leave and others should spell out how they will be managed in the new unlimited PTO program.
Here are some of the factors to discuss with your leadership team and define when developing your unlimited PTO program:
- Eligibility – determine who is eligible to participate in your unlimited PTO program, considering whether both exempt and non-exempt staff and which levels and departments can participate.
- Blackout periods – will there be times when team members aren’t allowed to take time off? We recognize that there may be certain times when it is difficult to have too many people take time off and these would be the periods to require prior approval on a first-come, first-served basis. To have the program feel truly flexible, limit the number and duration of blackout periods.
- Approval process – teams need to ensure coverage and that client service continues as expected, so you’ll need to consider whether it’s appropriate to have an approval process for planned leaves of a full day or multiple days off in a row. This may vary departmentally or by service line.
- Coverage – consider whether you should have “limits” on the number of people within a department, or in a specific role or level, who can take time off at any point in time. This may include the firm’s half-day off on Fridays during the summer or for specific roles, such as client support function that require a team member be available for client questions.
- Accessibility and response time expectations – firms that develop clear requirements for how quickly calls and emails are returned (even if it’s only to confirm receipt and set a future date for follow-up) are likely to have fewer upsets operating in a more flexible manner. Team member calendars should clearly reflect accessibility details – whether team members are off or not and how they can be reached when they are available but working away from the office.
- Mandatory time off – research shows that vacation can be as important to mental and physical health as regular exercise and sleep. Consider how your firm will ensure that team members are taking the leave they need to be effective in their work, such as a requiring that each employee schedule a minimum of one full week off each calendar year (in addition to other intermittent time off throughout the year).
Measuring success and ensuring accountability
As you transition to unlimited PTO, plan to assess the program’s success at regular intervals. Building in an evaluation process will provide support among your leaders who are less confident about the change and will allow them to rest assured that the program will be adjusted if results aren’t what you’re anticipating. Any program you create should protect your firm’s business model deal-breakers like:
- Production is at or above expectations
- Projects are being completed in the anticipated timeline
- Client service hasn’t been negatively impacted
- Team members are taking time off as expected and are satisfied with the program as designed
Consider evaluating your program at 90 days, 180 days and year-end, with an ongoing annual review after the first year passes. Rather than trying to build the perfect program out of the gate, be willing to adjust and make changes over time to ensure the program meets both the needs of the firm and your team members for the long-term.
Ensuring team members feel empowered to use their unlimited PTO
Wouldn’t it be a shame if you built the perfect unlimited PTO program and your people didn’t benefit from it? This sometimes happens with flexibility programs because team members feel guilty for participating and don’t take advantage of the options available to them. Why Work Sucks and How to Fix It by Cali Ressler and Jody Thompson posits that most of this guilt comes from “sludge” where people “jab” at each other about their flex schedule. Examples of sludge are comments such as “I forgot you worked here,” said to someone who works from home on a regular basis, or “getting your beauty rest?” spoken to someone who prefers to start and end their day at a later time than others. Team members won’t utilize our flexible work programs, or stay with our firms, in the face of such jokes and negativity.
We recommend you educate your leaders to stamp out potential sludge and work to create a culture where team members feel like they are winning in both their work and their personal life. You can start by:
- Encouraging leaders to publicly share their use of flexibility and promote the personal benefits they experience. (“We don’t just say we offer flexibility – our leaders take advantage of it, too.”)
- Insisting that your people lead by example and mark private appointments as personal on their calendars rather than as just a generic appointment. (“The partners take time in the middle of the day for a personal issue, so it’s okay for me to do it too.”)
- Finding ways to emphasize what your team members do when they’re not at work. At Middleton Raines + Zapata, a public accounting firm in Houston, team members are encouraged to snap photos of themselves with a company symbol (the MRZ “hand”) while enjoying themselves away from the office to promote fun and time off and encourage a healthy work/life balance. (“I’m not the only one who has a life outside of work, our leaders do too.”)
Start creating a culture of acceptance for work/life integration to realize the full benefits of your unlimited PTO or other flex initiatives.
P.S - This summer, we launched the 2022 ConvergenceCoaching® Anytime, Anywhere Work™ (ATAWW) Survey. In its sixth edition, the ATAWW Survey examines the adoptions of remote and flexible work practices in accounting firms across the country. Our team is carefully analyzing the data and excited to share the top findings in early January. You can learn more about the findings via our comprehensive ATAWW Survey Results Summary, which will be shared directly with survey participants. If you did not participate in the survey, you can sign up to receive the report once it's published by going to our website.