Unlimited Paid Time Off

Monet Davenport:
Welcome to Press the Issue, a podcast for MasterWP, your source for industry insights for WordPress professionals. Get show notes, transcripts, and more information about the [email protected]/presstheissue. Hey there everyone, my name is Monet Davenport. You probably recognize me from the introduction of all the Press the Issue podcast episodes, and this is my first time here on an actual episode, so I’m super excited. I’m here today with none other than Rob Howard. How are you doing today, Rob?

Rob Howard:
Hey Monet, I’m great. How about you?

Monet Davenport:
I’m doing great today. Glad to be here. We’re here today to talk about a topic that can be on the edge of controversy depending on who you talk to, and that is the matter of unlimited PTO or unlimited paid time off. And as many of you know, Rob is the owner and CEO of Howard Development and Consulting, kind of the parent company of MasterWP and Press the Issue. And he has some very interesting views on creating an ideal work environment for his remote employees, centering around work life balance and allowing that flexibility that everyone loves. Today we’re going to be discussing his thoughts and philosophies of whether companies should be using unlimited PTO, if it is used, how should it work in a company and some of the benefits of having that flexible PTO policy. My first question for you is, what are your thoughts in regards to companies having an unlimited PTO policy? Because there’s so many different opinions among business owners of how flexible they should be and how available they should make this paid time off available to their employees. What are your thoughts?

Rob Howard:
Sure, absolutely. Well, I thought obviously a lot about this and how it kind of fits into our overall work life balance. And I would say that where we’ve landed, we don’t technically offer unlimited paid time off, but we have a very flexible policy that is really focused on equal treatment of everybody. And I think before I dive into the reasons that I don’t love the idea of unlimited paid time off, I’ll talk about some of the good things. I think the best part of it is that it really maps the idea of a results only work environment. Which is of a slightly different concept, but I think basically lands you at the same place, which is that it’s not about how much time your butt is in a chair staring at a computer screen, it’s about what you’re accomplishing. So I think that establishing that level of trust and focus on results is a very good thing.

And if you can do that well and you have a manager and an HR team and everybody else who’s involved in that decision making is on board with that than the unlimited PTO concept can work really nicely. I think it’s also great in that it leans the company more towards longer paid maternity and paternity leaves, more flexibility around caring for family members who may be older, or maybe it’s childcare, or they may need extra help somewhere in your sort of family circle or close relationships. So those are the really good things about it. I think the drawbacks are mostly around situations where there isn’t enough trust between the manager and the employee and there isn’t enough clarity and consistency in how the rules are enforced around unlimited PTO. Right? So the big thing about unlimited PTO is that what it really means is unlimited paid time off with manager approval, right? So right there you instantly have sort of a subjective decision that’s always being made.

And I think what you hear when people talk about this from a negative standpoint is like, “Well, okay, it says here I have unlimited PTO, but if I wanted to take the next six months off, obviously my boss would say no to that,” right?

Monet Davenport:
Right.

Rob Howard:
So then you’re in this kind of weird dynamic where it’s like, well, the word unlimited means something, but in practice there are a number of veto points that could prevent you from taking paid time off when you want to take it, right? And then the other negative, which is more of a HR and legal detail, is that unlimited PTO, generally speaking, does not accrue to the employee as a financial thing that they’re earning. So if you contrast that with, at our company, we actually have employees who are accruing PTO and it goes into their account within our HR system, and if they leave the company that is money that they can then be paid. So if you have 10 hours of PTO, you can cash out those 10 hours. Whereas if you have unlimited PTO, because there is no balance there, in most cases, is no legal requirement for the company to pay you anything in terms of that PTO that you have been given.

So in some ways I think that … I’ve seen some companies explicitly say like, “Hey, isn’t this a great idea? Because now we don’t have to pay people out their PTO at the end,” and it sort of looks nice, but in practice it is not that nice. But I think from my standpoint, we can dive into issues around the equality and fairness of the application of the unlimited PTO concept. But one of the big things is just that I think that people should be earning things that are equivalent to money. Like PTO is money at our company and you’re getting paid for something different than your work time, but you’re still getting paid for it. So unlimited PTO kind of turns into almost like a phantom benefit that it’s great if it works out and your manager is on board with exactly what you want, but of course, the moment that manager starts to diverge from what you want as an employee, you start to run into trouble.

Monet Davenport:
Yeah. That’s so true. So what I’m hearing from you is that the word unlimited in the context of paid time off can kind of be a relative term because when you look in the dictionary, the word unlimited kind of gives you the idea that there’s no limit or there’s no restriction in terms of a number, and that can actually harm a business owner in the long run if someone chooses to abuse that benefit. But at the same time, from the standpoint, at least of an employee, I’ve worked at a number of different companies where … Ranging from huge corporate giants to some of the smaller agencies, where they offer some of these benefits, but like you said, there’s like this unspoken hesitance where you want to take some time off for vacation and you don’t want your manager to look at you a certain way, so you kind of hesitate to do that.

Rob Howard:
Yeah, exactly. And I think what you’re getting at is that there’s this subjective nature to the decision, right?

Monet Davenport:
Right.

Rob Howard:
So I think as with many parts of hiring and management and human resources, the subjectivity is where, I think … There’s a couple things that pretty much always come out of subjective decision making. One is that you typically see that company augmenting existing socioeconomic disparities. So that could be race, that could be income, that could be gender, that could be how much economic power this person, the employee has just be like, I have better things to do than deal with your crap at this company. You’re always going to basically sort put a magnifying glass on any existing disparities whenever you have a subjective decision. One of the things that we’ve tried to do is really eliminate as much subjective decision making on the HR policies as possible.

So to me, it’s a red flag, if the rule is ask your manager and that’s it. What I really want to see is a setup where you can talk to your manager about it, but your manager is then going to follow a codified set of quantifiable decision points to figure out what to do. Obviously there’s always going to be gray area, but you really want to minimize that gray area. So when we think about our employee handbook and our PTO and HR policies, minimizing gray area and minimizing subjectivity is a really important goal for us because that also minimizes the chance of an unfair or disproportionately negative impact happening to one person or one group. And I think this is something like, you see this in salary negotiations too. Who negotiates the highest salaries? Well, it’s the person who is coming from the most typical tech dude background most of the time.

And then there’s a lot of people who don’t have the knowledge that this is even an option, or the comfort with being pushy and who frankly would probably get penalized psychologically by the hiring manager for being pushy. Whereas I can go into negotiation and be pushy and people are like, “Oh, look at this guy, he’s really skilled, we should give him more.” We want to really eliminate that dynamic everywhere that we can. And I think on the worst case scenario for unlimited PTO is it a really amplifies those existing bad dynamics in the company, and it amplifies inequalities that already exist, and the company’s job should really be to reduce those rather than amplifying them whenever possible. With unlimited PTO, you think about, okay, well I have to first have the courage to ask my manager, then actually ask my manager, then they have to approve it.

Then there might be the sort of side eye that you described a few minutes ago, or there might be negative feedback from other team members or somebody else who is not really technically involved in the decision. But that vibe is part of the decision. Again, if everybody’s on board with the same plan, then it works really well. But I think that it is pretty unlikely that every single person at your company has the exact same internal assumptions about exactly how much and when you should take time off from work. From our standpoint, what we’ve done is implemented what I would describe as a flexible and non-subjective policy that I think still gives people a lot of control over their paid time off and also tries to get rid of these, in my opinion, just landmines of subjective decision making. The other thing that that actually is good for is, as a manager, I have fewer decisions to make because I’m not being asked to make as many subjective decisions.

And in fact, other team members often will approve PTO before I even see it because they’ve been authorized to say, “Well, are these three criteria met? Then this PTO gets approved.” So the way we do it is our employees accrue PTO on the basis of how many hours they work. So it’s something like one hour of PTO per 11 hours worked, which adds up to about 21 or 22 days over the course of a full-time year if you’re working 40 hours per week. Basically more than four weeks of paid time off is going to get accrued. And we also have 15 paid holidays on top of that so you’re in the 35 or 36 day zone. And then we also have family and medical leave, which is separate from PTO, so that would be a hospitalization or a new child or something like that.

So if you think about the paid time off policy, basically, rather than making it unlimited, we just make it generous and accrued in a way that is applied equally to everyone. And that way that we have employees who don’t work 40 hours a week, they might work 20 or 25 or 37, they’re going to accrue PTO at the same rate based on their hours worked as everybody else. So you always have of a properly proportional amount of paid time off and it is yours and it is your money. The way I look at it is that once you have earned it, you can use it whenever you want. I think one area that we differ significantly is that if you as an employee have accrued a PTO balance, there is no opportunity for your manager to veto your use of that PTO, right?

And I think that is really the kind of key change that we’ve made that doesn’t exist at many other companies as far as I know. In other words, let’s say you have eight hours of PTO on your balance and you say, “Hey Rob, I want to take off the rest of the day at half day tomorrow,” you’re telling me you’re not asking me. And that is how it’s supposed to … how it’s intended within the company because it’s like, “Hey, this is my time and my money.” Obviously you don’t want to abandon a client, like if you just suddenly closed out Zoom mid meeting and told the client you were taking the rest of the day off. That might be a little weird, but we want you to be able to be flexible. So as long as you have that balance, you can use it, and you can submit an automated … They call it a request, but really it’s more like a notification, and then it goes through our systems and it deducts from your balance and that’s yours.

So I think there’s pros and cons to every system. And again, certainly there are scenarios where somebody could get more total time off in the unlimited PTO regime if it all worked out. But what we provide is essentially … What’s the word? Unstoppable PTO or unvetoable PTO, right? Where basically you can say, “Hey, I’ve got a balance, I’m going to take tomorrow off,” or whatever, and it’s yours and it’s your choice to do that, right? And no, nobody’s giving you the side eye because everybody has that same deal. I think that’s really helped everybody with work life balance. And as I mentioned, it’s really made life easier as a manager too, because I don’t have to think about that stuff. I don’t have to subjectively say, “Well, is Monet doing this and Brian’s doing that, and is that an indication that one person is more dedicated than the other?” It’s like, no, this is the deal and we’re just all following through with the deal that already exists.

Monet Davenport:
Thank you for listening up to this point. Press The Issue by MasterWP is sponsored by LearnDash. Your expertise makes you money doing what you do, now let it make you money teaching what you do. To create a course with LearnDash, visit LearnDash.com. Our mission at MasterWP is to bring new voices into WordPress and tech every day. The new MasterWP Workshop series does just that. Our new live and recorded workshops on everything from code to design to business, turn WordPress fans into WordPress experts, find the workshop for you @workshops.masterwp.com. Use the code podcast10 for a 10% discount. Now back to the podcast.

Monet Davenport:

I wanted to touch on a couple of things that you mentioned from an employee standpoint once again, and having that balance there is super important. A better way to phrase that term, unlimited PTO might be, like you said, inevitable PTO. Because there are limits at the end of the day, but the time you earn off is sort of proportionate to how hard you work as an employee. So that could be a great incentive for an employee where they talk to themselves and they say, “Okay, if I power through this week, I get this project done, I get these tasks done and knocked out, that’s going to benefit me in the long run because I’m accruing PTO that I can use for vacation or an emergency,” or like you said in the end, we can cash it out if we would like to. Those are some pretty great benefits from my perspective. And also having things set up where you mentioned applying for time off is more like a notification than waiting for an approval.

It kind of creates this unspoken sense of trust between an employee and an employer because on the flip side, when you have a finite amount of PTO, like say two weeks a year, like a lot of these companies offer, even in that situation, there can be this unspoken dynamic where your boss can say, “Well, I have to approve it if you want to use it,” even though it’s your time to use. And it kind of reminds me of a meme I saw where it said like, “Me waiting for my boss to approve my PTO request,” and it shows them already sitting in the plane looking out the window. Basically saying whether you approve it or not, I’m still going. Anyway, all jokes aside, it’s unfortunate that that dynamic has to exist with an employee and employer. But I can honestly say from my perspective, since I’ve been working here, having that flexibility has really done wonders for my productivity because once you come back from your time off, you’re refreshed and you’re ready to tackle the next thing on your plate.

Rob Howard:
And I think looking back before I was an employer, this was one of the most miserable experiences of knowing … I worked at a newspaper once and newspapers publish every day. So they were like, “Well, you’re the lowest ranking person, so you have to work on Thanksgiving and Christmas,” and all these other things. And I’m just like, I’m not really into this structure of not having control over my own time. I want to make sure that everything that we’re doing, I think holistically gives employees a lot of feeling of ownership over how the company operates, over the ability to transparently see the inner workings of things. And I think this is part of that, it plays into equal pay, it plays into profit sharing. And when you have a team who is clearly incentivized and empowered to do good things for the company, then these questions of like, Well, am I going to abuse my two weeks of PTO,” kind of becomes moot points because …

It’s not impossible to have somebody who would try to abuse a system. But I think we have so many incentives and have built a company culture around everybody being here for everybody else, and understanding how the company operates and how to move the company forward, that I see that as a very low risk thing. Whereas I think a lot of managers are constantly paranoid that their employees are somehow cheating them. And you even hear that from some company owners, especially with the whole hybrid work versus returning to the office stuff. You can see these owners and managers who are just in a extreme state of paranoia, in my opinion, where they’re like, “Are people doing work? Can you have a camera up on your computer all day, every day?” And I think all these things are touching on the same dynamic. And again, to take it back to the unlimited pay time off idea, if you are in a good place with your team, it can be great, but the moment you have that paranoid manager, the whole promise of unlimited PTO falls apart pretty quickly, right?

Monet Davenport:
Yeah, you’re right. And just the whole dynamic of working in a team environment, it just makes it so much more stressful when you feel like you have somebody watching over your shoulder, whether you’re working in a physical office or working from home. It’s just not a good feeling. And you could be one of the most productive employees in your job, whether you’re a designer or developer on the team. But just having that feeling of being watched, it really can affect the work that you do.

Rob Howard:
And the other thing I would add is that in addition to that surveillance problem, surveillance clearly reduces employee morale. But the other thing that clearly reduces morale is an awareness of vague inequities between employees. And I think that the unlimited PTO thing, the Achilles heel is that you’re always going to end up treating one employee significantly differently than another in an unlimited PTO system because there’s always going to be somebody who asks for more or needs more. And because you’re not metering it or measuring it in any way, I think it inevitably creates weird vibes between people, right? Whereas if we have a measurable, transparent system, there may be somebody who would actually really have loved to have a little bit more time, or didn’t need all their time and it rolled over to the next year.

But what we can say is that despite people having different lifestyle needs or different lifestyle goals outside of work, everyone is being treated equally from a pay standpoint, including their PTO. I think that that gives everybody at the company, not just between the employees and managers, but really the whole team holistically … We kind of all have the same vision for how we operate, and what the rules are and what the expectations are. And I barely need to do anything with PTO because it just is a system that everybody is aware of and it works. It takes me out as the veto point in 99% of situations unless there’s some weird, very strange edge case. And then it gives everybody the comfort that the system is set up in a way that treats everybody equally and fairly. And again, I think that really does wonders for everybody’s comfort and morale with not just time off, but really every interaction that we have as a team.

Monet Davenport:
Absolutely. And I feel like this discussion we’re having is just scratching the surface of some of your thoughts because we do have some other episodes that go a little deeper into some of these related topics like equal pay, and I believe we have one on pay transparency where a couple of our HDC employees talk about their experiences and thoughts on that. But I feel like we could talk another 30 minutes to an hour about these things.

Rob Howard:
Absolutely. It seems simple, but there’s so much to unpack and there’s just so many old fashioned or old school approaches that seem normal, but in fact, in my view at least, should probably go by the wayside. Not just because they’re not good for employees, but because sort of selfishly as a manager, it makes my life easier too. The fewer decisions I have to make, the less friction I have, the better everything is going to be, and the more we can just put our heads down and do great creative and technical work. I think that the future hopefully, will be more along the lines of this team empowerment and employee empowerment angle, and I think hopefully we will prove that this is a winning formula, and everybody else will adopt these ideas and bring them over to their own companies.

Monet Davenport:
I totally agree. Well, I think that’s a great point where we can kind of wrap up and tie everything together. Overall, we talked about Rob’s philosophy on using what he calls unvetoable paid time off, how it’s benefited employees, including myself. It really creates an environment where you not only feel trusted as an employee, but where you can successfully work toward a goal with a team without feeling like you’re under surveillance. And especially now that we’re living in times where it’s post pandemic technically, but sometimes these emergencies and things can come up that needs to be taken care of. And working in a job where you have that flexibility and can feel trusted is really a wonderful thing. I really appreciate you taking time to chat, Rob, and we’re looking forward to hearing your thoughts as well. What do you think of this matter of unlimited PTO? Go ahead and tweet us at _MasterWP and let us know. We’re looking forward to discussing this further with you guys. You all have a wonderful rest of your day. And Rob, thank you again.

Rob Howard:
My pleasure. Always great talking to you and looking forward to next time.

Monet Davenport:
Thank you for listening to this episode Press the Issue is a production of MasterWP, produced by Allie Nimmons, hosted, edited, and musically supervised by Monet Davenport and mixed and mastered by Teron Bullock. Please visit MasterWP.com/presstheissue to find more episodes. Subscribe to our newsletter for more WordPress news @masterwp.com.