Developing an Unlimited Paid Time-Off Policy That Works Four tips for making the transition as seamless as possible.

By Zach Ferres

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Unlimited paid time-off is becoming increasingly popular in the startup and tech industries -- for good reason. It lets your team members know that you value their overall wellness and autonomy. But unlimited PTO isn't just some shortcut to make your team think you're a great boss; it actually delivers real ROI.

Employers who offer unlimited PTO report increased employee satisfaction, improved work-life balance and greater productivity. Plus, unlimited PTO can be a huge selling point when you're recruiting, and it will actually save your HR department an average of 52 hours per year.

Related: Unlimited Paid-Time Off? Seriously? How to Make It Work.

Some companies have seen success in implementing an "inbox zero" policy, in which vacations almost push employees to respond to all emails and complete outstanding to-do lists before leaving. Vacations also allow employees to free their minds, which encourages them to come back with new, creative ideas to contribute to the company's future.

More than that, unlimited PTO shows your employees that you trust them and value their lives outside of the office. For example, one of my developers is a dedicated triathlete, and unlimited PTO allows him to pursue his passion of competing across the country and still be an integral part of our team.

Not only do my employees enjoy unlimited PTO, but my company also benefits. To put it simply: Everyone wins.

Once you shake off the chains of limited PTO, you can uncover a culture of self-policing, where your employees are able to reward and discipline one another by working as a team. This promotes creative planning for individuals and the team as a whole, so it's not hard to see how this spurs commitment and increases productivity.

In their book, Gen Y Now, Herb Sendek and Buddy Hobart claim that teams will work together to maintain a sense of balance. For example, teams will reject members who aren't pulling their weight. On the other hand, they'll show dissatisfaction with members who refuse to take breaks. Recently, I had a chance to sit down with Hobart, and together, we formulated four things you can do to make the transition to unlimited PTO as seamless as possible:

1. Establish a mandatory minimum PTO policy.

Introducing unlimited PTO may cause confusion around what the "norm" is, and that confusion could deter employees from taking time off. Let them know that's okay! Utilize a minimum PTO policy to ensure that your employees get some R&R.

For example, Evernote offers a $1,000 bonus to its employees for taking a week off. If an employee doesn't take that vacation, he or she doesn't get the bonus. It may seem counterintuitive to pay an employee not to work, but ultimately, this strategy boosts employee productivity and prevents burnout.

2. Devise a method to track time off.

You need to know how much time everyone is taking off so you can improve the system. This could be as simple as keeping track on Google Sheets, or you could use tracking programs such as Centreli or Zenefits. After all, encouraging your employees to take time off is difficult if you don't realize they haven't been doing so.

Related: The Secret to Increased Productivity: Taking Time Off

3. Use a process for those requesting time off.

Unlimited PTO policies can't be a total free-for-all in which people can come and go as they please. You still need to have some processes in place for adequate preparation time and project handoffs. Create a system for your employees to follow. This may involve notifying a manager in advance, establishing a plan for delegating work to other teammates or creating an automated email response to let people know who should be contacted in the employee's absence.

4. Trust that your employees won't abuse your unlimited PTO.

If you can't trust them, why did you hire them? Give your employees the responsibility to make their own decisions in terms of how much vacation time they need. Let them take action and plan it. If they do abuse it, it's probably time to cut the cord anyway.Then, recognize that you made a hiring mistake. These things happen, but the overall message is still one of trust and empowerment.

Part of building a successful company involves creating a culture of trust, and an unlimited PTO system achieves this on several levels. This concept might buck tradition, but isn't that the point of game-changing ideas?

Related: Which Countries Get the Most Paid Time Off?

Zach Ferres

Advisor, Board Member & Investor

Zach Ferres is a serial entrepreneur, speaker and technology executive passionate about developing entrepreneurial communities around the world. He built and sold his first tech company at 24 and was the CEO of Coplex for eight years, where he supported the creation of over 200 startup companies.

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