Unlimited time off can work well for employers

Microsoft is the latest company moving from set allowances of paid time off to unlimited vacation, joining a growing list of employers like Adobe, Netflix and Goldman Sachs.

While only 6% of US employers offered unlimited leave, according to a 2022 employee benefits survey by the Society for Human Resource Management, the high-profile additions lead many to ask: is the perk as good as it sounds, and who benefits most?

Pros

• Recruit talent: For companies seeking new ways to stand out in a still-competitive labour market, offering unlimited time off is one option that seems to work. A Glassdoor study in July found that employee reviews mentioning unlimited policies were up 75% from pre-pandemic levels — and were overwhelmingly positive.
• Fight burnout: Burnout in the workforce has got more attention, especially during the pandemic. Taking adequate time off to rest is essential to employees’ health and long-term productivity, experts say. The policy can demonstrate trust and show workers they are valued, which can in turn improve morale and engagement.
• Save money: Companies can save money with unlimited paid-time-off policies because they do not have to pay out unused time when an employee leaves like they would under traditional policies. The policy also means one less administrative task to track.

Cons

• Underuse: Research suggests that employees often end up taking less time off under unlimited paid time off policies than traditional ones for fear of overstepping — especially in competitive industries like banking. One complaint is that the policies eliminate guidance on how much vacation employees should actually take.
• Potential abuse: While most employees will use time off responsibly, unlimited policies do open the door to the possibility of misuse. If absenteeism becomes a problem, an employee may burden their co-workers and hinder workflows.
• Overlapping vacations: Without restrictions, certain times of the year like summer and winter holidays may bring lots of out-of-office messages — so much so that it leaves those still working without sufficient resources.

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