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Blog>Trends>How Do Unlimited Vacation Policies Affect Employees? Over 1,000 Employees Weigh In

How Do Unlimited Vacation Policies Affect Employees? Over 1,000 Employees Weigh In

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Highlights

  • Nearly 3 in 4 employees feel positive about unlimited PTO policies
  • Unlimited PTO policies correlate with workers reporting the best work-life balance
  • 78% of employees support mandatory PTO — Millennials (79%) were more likely to do so than Gen Xers (76%) and baby boomers (71%)

Introduction

Work environments – both those at home and in the office – can seriously impact the way you view your time there and your time off. For instance, how often have you or your co-workers left vacation days unused? Why is that? Even with unlimited paid time off (PTO) becoming more common, are employees better rested or prepared? Are they more productive at work or more fulfilled in general?

We recently spoke to more than 1,000 full-time employees in the United States and compared the vacation policies their companies offered against important factors like productivity and happiness. Specific aspects of company culture reflected heavily in their responses. If you’re curious to see how unlimited PTO really affects employees – and what an effective and modern vacation policy looks like – keep reading.

A Look at Unlimited Vacation Days

Having no limit to the number of vacation days you can take sounds very convenient. According to research, employees feel good about it too, as nearly 3 in 4 respond optimistically about unlimited PTO as a policy. Here, we speak directly to employees with various vacation policies about their opinions on unlimited PTO.

Percentages of employees feeling positive about unlimited pto

Of those employees who already had unlimited time off, 82.1% felt positive about their PTO situation. They were the most likely group to feel this way, although a high percentage of people with other vacation policies, including PTO banks or a set two weeks off, were also supportive of the idea. Overall, more than 70% of employees surveyed were positive about the concept of unlimited PTO.

We also found that those who earned an annual salary of $45,000 or less were more likely to support unlimited PTO – a potential indication that this group prioritizes paid time off over a higher salary when job searching.

The Ideal PTO Approach

As with many things, there isn’t a one-size-fits-all approach to paid time off. That said, since companies can usually only choose one policy, they may want to consider which one suits the majority of their employees best. The next section of our study explores the most popular vacation policies among surveyed employees and references their answers against the policies they currently have.

Employee preferences for ideal vacation policy compared to current policy

Although preferences were a relatively even split between the four PTO policies we suggested, a slight majority of respondents (29.4%) wanted a system where their vacation time would accrue. In other words, if they had unused vacation days, they could “bank” them and use them at a later date, even beyond the fiscal year.

When we compared employees’ preferences with their existing vacation package, those who already had an accruing policy overwhelmingly chose it as their ideal solution, suggesting that their lived experience with the policy was positive.

Unlimited PTO, however, was still a popular choice, if not the most ideal option for many. Over 65% of those already under this plan said it was their ideal vacation policy.

Percentage of employees who support mandatory pto

Regardless of the specific number of days, most employees (77.5%) agreed that paid time off should be mandatory. Interestingly, there is actually no law that requires employers to provide paid time off, though most companies would have to in order to stay competitive and attract top talent.

Average Vacation Durations

Moving away from respondent opinion and looking strictly at the actual number of vacation days taken, we were able to get another perspective on how specific policies impact the likelihood of employees utilizing their vacation entitlements.

Average number of vacation days taken by employees

In the last year, full-time employees in the U.S. took an average of 11 paid days off work — just one more day than what is typically considered the minimum vacation time of two weeks, even in the midst of a global pandemic. Since the pandemic struck the country in March 2020, American workers are reporting working harder, perhaps in an effort to escape the widespread downsizing that many companies have been forced to implement as a result of COVID-related financial woes, and the inability to travel over the past year. It is also likely that with fewer workers left at a company, there is more to be done by individual employees.

Almost 44% of employees reported not having taken enough time off in the past year. This directly correlates to the fact that this group took just nine days off, on average – the least of any group surveyed. On the other hand, just over 45% of respondents felt that they did take enough vacation last year, averaging 12 vacation days. That’s just three more days off than those who felt they didn’t take enough PTO, suggesting that each and every day off counts.

How the Pandemic Has Affected PTO

Even though most white-collar Americans didn’t have to physically go into the office once COVID-19 struck, the need for a vacation was arguably elevated. We next asked respondents if they felt their company should alter its vacation policy in response to COVID-19.

COVID-19's effects on employee sentiment toward pto policy

53.6% of those surveyed felt their company’s vacation policy should have changed as a result of the COVID-19 pandemic. Across all policies and salaries, between 43.3% and 59.1% of people felt inclined to take off work during this time, even if they were fortunate enough to keep their jobs. People with just two weeks of PTO, however, seemed to feel this need for time off more desperately than others post COVID-19.

It’s important to note that although employees across all salaries felt pressure due to COVID-19, lower-salaried workers were the most affected. This group was the one most likely to be negatively impacted by the pandemic in a variety of ways, from physical to financial. More than half of those earning $30,000 or less a year agreed that COVID-19 had left them needing time off.

PTO’s Impact on Productivity and Satisfaction

The final section of our study looks at the effects of various vacation policies on employee overall job satisfaction. We also considered an employee’s ability to maintain a healthy work-life balance in relation to their respective vacation policies.

Job satisfaction compared to pto policy

Here we can see the impact these policies have on employees regarding how they feel at work. Employees with unlimited PTO were the most likely to report a healthy work-life balance. In terms of job satisfaction, this policy also ranked high among employees.

The “Right” Vacation Policy

While evidence revealed a high level of individualism, with different policies working best for different kinds of employees, the concept of unlimited PTO seemed to appeal to many. Most employees who already had unlimited PTO felt positive about their experience and were appreciative of the opportunity to take time as needed. Alternatively, those who accrued time off were also happy with their vacation policy.

Ultimately, individual employees may be better suited to varying types of PTO policies. If you’re looking for work to suit your own needs, head to Joblist. Joblist filters your employment opportunities based on your individual skills, needs, and wants. To work – and take time off – in the best way for you, head to Joblist to see what the world has to offer.

Methodology and Limitations

We surveyed 1,009 employed people. 57.2% of respondents were men, 42.2% were women, 0.3% identified as nonbinary, and 0.3% chose not to disclose their gender. The age of respondents ranged from 24 to 58 years with an average age of 37.

For short, open-ended questions, outliers were removed. To help ensure that all respondents took our survey seriously, they were required to identify and correctly answer an attention-check question.

These data rely on self-reporting by the respondents and are only exploratory. Issues with self-reported responses include, but aren’t limited to, the following: exaggeration, selective memory, telescoping, attribution, and bias. All values are based on estimation.

Fair Use Statement

Especially in a pandemic, we could all use fairly distributed vacation days. If you think an employee or an employer would benefit from this information, you are welcome to share it. Just be sure your purposes are noncommercial and that you link back to this page.

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