Unlimited PTO: Pros and Cons

Modern workplace is focused on creating environments that fuel productivity. Allowing employees to take unlimited paid time off (PTO) is one of its recent trends. Assuming that the employees doing their job and achieving the expected outcome, they can take a vacation as they need and come back refreshed.

What sounds like a dream come true for a regular employee, can turn out to be an unaffordable luxury for a company and a planning nightmare for a team manager.

Unlimited vacation policy is one of today’s tendencies that many companies are trying to implement. But is it really a great way to increase productivity, motivation, and loyalty?

Let’s see what the pros and cons of unlimited PTO are in various aspects of work life.

The Pros

The first advantage of unlimited time off for your business is that you will have more motivated employees. Just like it’s great for the brain to take regular breaks of focused work, so it is good for the mind, body and soul to switch off from routine.

Going on a vacation or just having time off work more often is one way to come back even more motivated and do your best job. That’s how employees see it too.

Next, expect productivity to increase. Multiple studies suggest that workers who have holidays more often are more creative, get more done in less time and don’t struggle with concentration.

The next positive effect that comes as a result of the unlimited vacation policy is a bit ironic - employees actually take less time off when they are given the chance. Maybe the freedom of choice is enough for them. After all, we’re all seeking flexibility in every aspect of life.

For those going to work every day, the ability to take a vacation later this month or every 2-3 months can be liberating and actually lead to working more.

Employees are more satisfied with their job when the unlimited PTO is present. Some even end up respecting their managers more and doing a better job for them. Also, expect such workers to stay with the company for longer, even if another opportunity comes their way.

The Cons

As you can see, the pros of unlimited paid time off are plenty. But there are some negatives too. For example, you can notice the opposite effect and end up having a distracted team.

If employees don’t know how to manage their time well and aren’t invested in the job, they might always plan their next vacation and eagerly await it. This will affect their performance negatively and the business might suffer.

Additionally, it might get a bit complicated to keep track of time off and plan ahead. The planning process will require a different approach, something you might not have tested yet. This might lead to using a new tracking tool, going back and forth with team managers and employees, setting limits, etc., until you have a system that works for everyone.

Also, remember that it might be tempting for some of your employees to start abusing the newly earned freedom. So, it’s important to find the balance.

Crucial Points

Unlimited PTO might work for one business and fail to give the benefits we mentioned for another. You need to test, but it’s best to do it in small steps. Introduce the paid time off idea to your workers and see what they think about it. Make sure you emphasize on how it can benefit their health and work performance, but don’t forget to mention it should be taken seriously.

Set some limits in advance and do let your team know you’re testing the concept now before making it stick. This way they will be careful with how much time they actually take off, will make sure they truly enjoy their vacation but when back to work, their mind is at the right place.

However, if you’re only doing this because it’s a trend on the rise and you don’t want to be left behind, it might lead to more complications than you can imagine.


There’s no one-size-fits-all approach for a vacation policy – especially when you’re thinking of implementing unlimited PTO. So, if you consider modifying your company’s vacation policy, take into account its benefits and drawbacks, and analyze them thoroughly to see if this innovation will work for your business.


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