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Is Unlimited PTO Right for Your Startup?

unlimited vacation days

In theory, the idea of having unlimited paid vacation days rocks! Who wouldn’t want to work for a company that offers its people all the vacation they want? I imagine backpacking through Europe (as long as my laptop slides easily into my backpack, of course) and sipping Belgian hot chocolate at a cafe while putting in a lazy hour or two of work. But is it really as careless as that?

Ask yourself these three questions to see if having an unlimited vacation policy makes sense for your startup:

1. Will people feel guilty using it?
People who are truly invested in your company and its vision may feel guilty using it. In fact, startups are notorious for demanding employees work into the wee hours of the night and give up their lives for the dream of turning their startup into something amazing. A person with this type of personality is not going to be the one actually using the unlimited vacation plan. In fact, you may have to force them to take some days off.

2. Will some people take advantage?
Unfortunately, the kind of employee who will probably use the unlimited vacation time (and perhaps too much of it) is the one who’s in it for himself and not the company. Did you use that perk to lure him there? This employee might not consider responsibilities. It may fall on your hard workers to cover for your chronic vacationers to ensure everything is getting done. Do you want that type of division in your workforce?

3. Can you afford it?
Every dollar counts in a startup, just like every employee’s time counts. If you’re communicating often and sharing numbers and goals, your people should understand how tight money can be at the beginning. While it sounds good to say you offer unlimited PTO (or if you haven’t yet decided how you want to handle PTO so you just trust your people to take what’s needed), it could be difficult. After all, every single person being productive every single day can sometimes be what determines whether a startup makes it or not. Which brings us back to the people who are truly invested in your company: They’ll know  and feel guilty using those vacation days if you can’t afford it. And those who simply don’t care will, well, not care if taking all those free days could be hurting the company.

It’s well-known that people are happier (and thus, more productive) if they take time to unwind and re-energize on a vacation or spending a day off with family and friends. You don’t want your people to burn out or lose productivity trying to work all the time. But maybe during this delicate time of at startup’s life, PTO should be reflected in commitment. Maybe the better way to establish PTO for your startup is by letting your people earn generous vacation to cover all their needs.

Then they can feel less guilty about taking vacation, knowing that they earned each and every day they’re enjoying. And your people won’t feel guilty leaving the laptop at home.

BambooHR is the #1 HR software for small and medium-sized businesses. We set you free from spreadsheets so you can do great work.

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