Are you considering adopting an unlimited PTO policy at your company? Before you do, check these unlimited PTO statistics.
The Desire for Unlimited PTO
Will you get more interest from job seekers with unlimited PTO?
Yes, the data shows that lots of people want unlimited PTO and it’s a great way to stand out from other companies.
- 72% of employees name unlimited PTO as their number-one most valued employee benefit, above wellness programs, retirement plans, on-site medical care, and paid sabbaticals (MetLife, 2019)
- 36% of Americans have only 10 or fewer days of PTO each year, and 86% of Americans wish they had more PTO to use (Go City, 2023)
- Employees who earn less than $45,000 tend to feel more positive about unlimited PTO than other employees, but nearly three in four employees feel good about having an unlimited PTO policy at their companies (Joblist, 2022)
- 72% of employees who work at a company that encourages them to take time off are happy with their companies, compared to just 42% of employees who work for companies that discourage breaks (U.S. Travel Association, 2018)
If you’re trying to spruce up your benefits package to make recruiting easier, unlimited PTO will help.
Does an Unlimited PTO Policy Work?
While unlimited PTO sounds great, getting it to work is not easy.
There is some data to suggest that employees take more time off at companies with unlimited PTO. Namely’s 2022 unlimited PTO survey found that workers with unlimited PTO took an average of 12.09 days off, while limited PTO workers took 11.36 days off.
Companies offering unlimited PTO may also see a reduction in human resources hours. Using unlimited PTO, Ask.com effectively saved 52 hours of HR administrative time each year. Without the need for calculating accrued hours, less time is spent managing each employee’s paid leave eligibility.
So employees take more time off and HR spends less time managing it all? Sounds great right?
Not so fast.
That same Namely study also found that workers are taking less time off in general than they used to, regardless of the type of policy. Those with unlimited PTO took almost one full day less in 2022 than they did in 2018, implying that unlimited PTO doesn’t always equate to long or frequent breaks for employees.
Also, Namely’s finding that workers with unlimited PTO take more time off than those without might be an anomaly.
A Joblist survey of over 1,000 people found that those with unlimited PTO took just 10 days off, on average. Meanwhile, workers in an accrued PTO bank system took 11 days off, while workers given a lump sum of over two weeks for their annual PTO allotment took 13 days, on average. Additionally, 43.7% of respondents don’t feel like they took enough vacation time.
On top of that, Sorbet’s 2022 PTO report found that workers with access to unlimited PTO still take about 30% fewer days off, on average, than those with more limited policies.
What could explain the conflicting data?
We need to be very careful that we’re comparing similar companies in each study. Comparing all unlimited PTO companies to all standard PTO companies isn’t a great comparison. Many companies offer extremely limited PTO, or no PTO at all. That will skew results heavily. Be careful with any headlines you see.
When I review the data, it looks like employees take 10-30% less time off on an unlimited PTO system than a comparable accrual PTO system.
How Employees Feel About Unlimited PTO
According to Joblist, people with unlimited PTO at their companies were generally 26.8% of respondents choose unlimited PTO as the ideal PTO policy. 29% chose an accrual PTO system.
On the whole, most people are satisfied with an unlimited PTO policy. And it’s pretty close to the satisfaction with standard
A Pew Research Center survey conducted in February 2023 found that 40% of workers use less paid leave than they’re allowed. Although 52% stated they don’t feel like they need more time off, 49% shared that they worry about the challenge of getting caught back up with work when they return from leave, causing them to avoid using all their time.
Other reasons workers don’t use their allotted time, including taking advantage of unlimited PTO, include:
- Not wanting coworkers to take on extra work while they’re gone
- Believing that taking time off will interfere with their advancement
- Fearing that they’ll be fired or punished for taking too much time off
Unlimited PTO vs. Lump Sum and Accrual PTO Systems
According to 2021 data from the Bureau of Labor Statistics, the average private sector employee earns 11 days of paid vacation after working for a company for one year, while it can take about 20 years for the same employee to earn 20 days of vacation. Public sector employees tend to earn vacation time faster, with an average of 13 days after one year and 22 days after 20 years of service.
Nevertheless, 61% of workers with a limited number of PTO hours don’t use them all by the end of the year, equating to about $1,800 in losses per worker (QuickBooks, 2019). With unlimited PTO, this still happens, you just can’t see it. With an accrual system, you’ll know exactly who isn’t taking PTO and can take action to fix it.
Is Unlimited PTO Right for Your Company?
From all the data that I’ve seen, I stand behind these statements:
- Unlimited PTO is a very attractive benefit. It’ll help you get more candidates and close them.
- Your employees will take about 10-30% less PTO on an unlimited PTO policy compared to an accrual system.
- Employee satisfaction is slightly higher on an accrual system, but still comparable.
From my personal experience managing unlimited and accrual PTO policies, there are two things to watch out for that don’t show up in the data:
- My biggest challenge with PTO policies has always been to get the highest performers on the team to take enough PTO. I always have to push them. This is a lot easier to do with a PTO system that’s trackable.
- A hard charging manager can easily create a culture of “no PTO” for everyone underneath them. They don’t even have to say it. If they push their team constantly and never take PTO themselves, that’ll become the standard. This happens regularly in unlimited PTO companies.
While statistics are fairly comparable between unlimited and accrual PTO systems, I’d rather use the PTO system that catches the outliers. Accrual systems keep bad managers from getting out of hand while helping your top-tier folks get the rest that they need. That’s why I avoid unlimited PTO in every company that I manage.
The only tangible benefit you lose out on with an accrual system is the recruiting bump that unlimited PTO gets.
But honestly, this recruiting boost is pretty small. If that makes or breaks your recruiting, I’d argue that you have much bigger problems. And there are plenty of ways to put your benefits package WAY over the top like a summer or winter break (1 week off for the whole company). Or covering 100% of a great health insurance plan. People really loved both of those when I offered them.
