Unlimited personal time off may sound generous and people are drawn to the idea of being able to take as much time off as they like without being penalized, but it’s actually harmful to both employees and businesses in the long run. Let’s take a look at three main reasons why unlimited personal time off benefits no one and should be avoided at all costs. First, unlimited personal time off reduces productivity and increases stress levels because people don’t plan ahead when they know they can simply take the day off if they don’t feel like working.
A vacation isn’t just a break from work, it can also re-energize you. A recent study found that vacations recharge our batteries and make us better at what we do when we get back to work. Indeed, research suggests that taking regular breaks is important for optimal health and productivity. Unfortunately, American workers are not taking enough time off—research shows that U.S.
Studies have shown that while people did take more vacation when they were given unlimited vacation time, it made them no happier. So go ahead and use all those vacation days you’ve been hoarding, but don’t expect your life to be changed by doing so. Sure, working at a company that encourages employees to disconnect can help with work-life balance (for example)… But there are other ways employers can provide freedom from feeling overworked.
A study by Virgin found that 44% of all working adults never use their vacation time. This was true even among vacation-eligible employees at more than a third (35%) of companies. And that doesn’t just mean they weren’t taking it—it means they didn’t even have any allotted days off left to take.
Extra vacation days may increase employee quit rates
In most cases, employees don’t take all their vacation days. According to a 2015 study by Project: Time Off, 40 percent said they never use all their vacation days. That’s fine, unless you think your staff are slacking off on purpose. In reality, many people just can’t be away from work that long and return to find more work waiting for them—the dreaded catch-up syndrome.
Some may argue that unlimited time off is good for employee productivity, but a study by The Workforce Institute at Kronos Incorporated revealed that extended vacation can reduce employee morale and performance. A survey found most employees returned from their vacations exhausted and less productive. The report recommends keeping time off limited to prevent exhaustion and help employees maintain work levels when they return to work. Ultimately, companies with shorter vacation policies tend to outperform those with longer ones in terms of revenue growth and employee retention.
Here’s what Fortune has to say on Unlimited PTO
Check out why Free Snacks are not Part of Company Culture