PTO Exchange, the benefits platform that allows employees to convert the value of their unused paid time off (PTO), and Lighthouse Research & Advisory, an analyst firm that focuses on the HR space, today released its Biased, Burdensome, and Burned Out: The Real Story of Unlimited Paid Time Off Report. The report uncovers the repercussions of Unlimited PTO plans.
The promise of unlimited leave is incredibly appealing, but in practice, the decision to adopt unlimited leave plans is for the convenience of the employer and doesn’t actually benefit employees. Many workers end up taking less time off overall simply because they don’t have a protected set of days that they can claim each year, and others say that favoritism and other factors make unlimited PTO untenable. Dissatisfaction rates are so high on many public forums like Glassdoor, Blind, and Fishbowl that workers use terms like “scam” to describe their company’s leave program.
“As we looked into the hype of ‘unlimited PTO’, we found that this benefit created a biased system and culture from the executive and managers to the front-line workers,” says Rob Whalen, Co-founder and CEO of PTO Exchange.
Key insights from the report include:
- Interest in unlimited PTO plans has closely mirrored the talent shortage in recent years as companies look for ways to differentiate themselves to discerning candidates, but many companies don’t realize the downsides of implementing an unlimited leave plan. To get it right and truly serve as a benefit to the workforce, all of the variables have to align perfectly. In reality, workers who have been operating under an unlimited leave plan for a longer period of time are much less likely to say it’s a benefit to them personally.
- 83% of workers with unlimited PTO say that their company has a culture where people avoid taking time off because they are too busy. The culture of the organization has a major impact on how people perceive time off (is it a luxury or a necessity?), and the type of company that is drawn to the allure of an unlimited leave plan is the same type of company that typically has an always-on work culture.
- While there are some employees that like unlimited PTO, there’s a major potential for bias in how the leave is administered. The evidence shows that people of color, women, and lower-income workers are all less likely to use their paid leave in normal circumstances. Employers that are concerned about how to support each segment and demographic in the workplace should rethink the offering of unlimited PTO plans because of this.
“When this research effort began, I was surprised at the lack of data on unlimited PTO in academic and industry research,” says Ben Eubanks, Chief Research Officer at Lighthouse Research & Advisory. “In reality, this is the first real look at unlimited PTO through the eyes of the employee, and the picture it shows isn’t a very positive one. Employers that want to support their staff need to be very careful about the decisions they make as far as leave programs, avoiding the trends and fads and focusing on what really brings value to the workforce.”
The results in the report are based on a survey in Q3 2022 of 150 HR leaders at U.S. organizations and 300 workforce responses from individuals currently working under an unlimited paid leave plan.
The Biased, Burdensome, and Burned Out: The Real Story of Unlimited Paid Time Off Report is now available to download here.
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