Unlimited PTO isn’t necessarily a common benefit among United States companies, but it is becoming more mainstream, especially within large corporations. Like other employee benefits, it has its pros and cons for both employers and their employees.
Are you considering adopting an unlimited PTO policy at your company? Before you do, check these unlimited PTO statistics.
The Desire for Unlimited PTO
Being able to take off from work whenever you want sounds like a dream. Essentially, that’s what unlimited paid time off offers employees. Unlike a PTO policy that caps the number of PTO hours or weeks an employee accrues, unlimited PTO gives an unlimited amount of time off that an employee can tap into when they need some time away from work.
Companies with unlimited PTO might gain more interest from job seekers when they’re hiring. They may also find it easier to manage an unlimited PTO policy than a traditional accrual or lump sum policy since there aren’t any hours or allotments to track. Instead, employees simply put in a request when they want to take time off and wait for it to be approved.
With its potential benefits, it’s not surprising that the desire for unlimited PTO is strong. Just look at the following statistics:
- 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)
- A 2022 survey of 200 companies by U.S. News & World Report found that only 20% of employers offered unlimited PTO, and 15% of those companies are in the technology sector.
- 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)
- 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)
Employees typically favor employers that offer a healthy work-life balance through the freedom to take time off without being limited by accrued hours or denied requests. In theory, an unlimited PTO policy may be able to help with some of the potential issues caused by other more restrictive paid leave policies.
At the very least, it could relieve some stress on employees who feel discouraged by their employers from taking time off.
Does an Unlimited PTO Policy Work?
Unlimited PTO can be an attractive option for many employees looking to prevent burnout at a new job. But is it as beneficial in practice as it seems? The following statistics detail the pros and cons of unlimited PTO policies.
The Case for Unlimited PTO
Research shows a rise in the number of paid time off days workers take with an unlimited PTO policy now, compared with just a few years ago. 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.
This is a change from 2018, when limited PTO users took more days off on average (15 days) than unlimited PTO users (13 days). Based on this study, we might conclude that employees are becoming more comfortable with the idea of unlimited paid time off and are more willing to use that time to take a break away from the grind.
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.
Where Unlimited PTO Falls Short
Interestingly, the same Namely that we referenced above 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.
In other words, while unlimited PTO offers more leniency with the amount of paid time off an employee takes, that flexibility doesn’t necessarily translate into an uptick in employee vacations, personal time off, or mental health breaks.
How Employees Feel About Unlimited PTO
According to Joblist, people with unlimited PTO at their companies were generally more satisfied with their work-life balance than workers with limited PTO policies. However, 58.3% indicated they had high job satisfaction, which is a bit less than the 60.2% of satisfied workers among those who receive a lump sum of two weeks or more of PTO to use for the year.
Something you may have hypothesized from these statistics is that employees with unlimited PTO may feel uncomfortable using their benefits. 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
I’ve covered several unlimited PTO statistics to get you thinking about whether unlimited PTO is the right solution for your company. Now, let’s compare unlimited PTO with what research says about other popular PTO systems: accrual PTO and lump sum PTO.
Accrual PTO is given to employees over time. For example, a company with an accrual PTO system might pay their employees one PTO hour for every 40 hours worked. Meanwhile, lump sum PTO is a specific number of PTO hours given to employees at one time, usually at the beginning of the year. Workers can then use their hours as they’d like throughout the year.
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.
In contrast, workers with unlimited PTO don’t need to “earn” vacation days by staying longer. Generally, this benefit is offered after a traditional probationary period, usually no longer than three months. Still, as I mentioned earlier, Joblist data shows people with limited PTO taking more time off than those with unlimited, up to three whole days per year on average.
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, employees don’t risk losing available days and related cash because they don’t have a set number of days to use.
Is Unlimited PTO Right for Your Company?
Like other PTO policies, unlimited PTO has its advantages and disadvantages.
Recruiters might see a rise in applications when a company markets an unlimited PTO policy and reduces some HR responsibilities. Employees could have a higher rate of job satisfaction and feel like their job prioritizes a work-life balance with unlimited PTO.
However, an unlimited paid time off policy doesn’t always yield happier employees who take advantage of their company’s flexible policy. Instead, you might find that workers take less time off, possibly because they worry about the potential workplace consequences of using their PTO. You know how I feel about unlimited PTO, but that doesn’t mean it’s the wrong policy for every company. These statistics prove that there are some problems associated with unlimited PTO, but there are also potential benefits that could thrive in the right companies with transparent policies and clear expectations.