PTO Packages, Work Productivity and Burnout Risk
PTO Packages, Work Productivity and Burnout Risk
What do companies such as Netflix, LinkedIn, Evernote, Hubspot, GitHub, and Dropbox have in common? Besides being some of the heaviest hitters in the tech industry, they all offer their employees unlimited paid (personal) time off or PTO.
Does this approach make sense for you or your company? Let’s find out.
Three Types of PTO
There are three types of PTO packages companies offer to their employees. These are:
- Traditional: Each employee gets a set number of days off. These are divided into subcategories, such as vacation, sick days, and personal days.
- Flexible / bank of hours: Employees take time off against a predetermined amount of total hours per year. There’s no need to specify the reason.
- Unlimited: Anyone can take as much time off as they want, when they want.
Dangers of Overwork in the Tech Sector
At first glance, you might scratch your head thinking that unlimited PTO is a crazy idea. However, in the tech industry, the real danger is overwork. Studies show that up to 43% of employees in technology companies are depressed. The main reason is due to overwork.
Surprisingly, this doesn’t happen because people don’t have vacation time. Instead, they aren’t using their vacation days. Or they might even take personal days to catch up on work. Even in companies that offer unlimited PTO, people aren’t taking time off.
In the general population, only 11.3% of people are depressed. The tech industry must take note that the rate of depression among their ranks is up to 4x higher than average. The data shows if you don’t take enough vacation, you are more likely to:
- Be distracted
- Get sick
- Make mistakes
- Be less creative
- Experience low productivity
- Burn out
Unlimited Time Off Benefits
Companies that offer unlimited time off experience several major benefits:
- Talent Attraction & Retention: A study by Glassdoor shows that 80 percent of workers prefer additional benefits over higher pay. Ninety percent of millennials say they prefer benefits to pay raises. In another survey, 51% of participants said they would take a job for 10% less pay if it offered unlimited PTO.
- Less Work for HR: Forget about keeping track of different categories of time off. Everybody just logs time off.
- No Need To Pay Back: For employers, unused vacation days don’t have to be reimbursed.
The Secret to Successful PTO Strategies
It’s been shown in numerous studies, that taking time off from work translates into higher productivity, stronger workplace morale, improved employee retention, and significant health benefits. The reality is that most people don’t take enough time off.
Despite Elon Musk and Gary Vee touting “the hustle” and the questionable heroics of working until you drop, we all need rest to perform at our maximum potential. Ironically, many in the tech sector ignore the data in this regard, and they believe they have some kind of superhuman stamina.
In many cases, employers have to encourage people to take time off, and some even establish a required minimum number of days off that employees must take.
Real World Results
In 2016, Indeed implemented an unlimited PTO package and tracked the outcomes. Here’s what they saw:
- Over 20 percent YOY increase in vacation days taken
- Extremely productive 2017 with record company growth
- Low attrition and high engagement rates
Looking for more tech sector job insight? Contact us or call us at 804-380-5388.