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Unlimited PTO… Friend or Foe? Small Business Benefits Attracting Top Talent in 2023

By January 1, 2023November 10th, 2023No Comments

Handling Paid Time Off (PTO) for small businesses can be challenging for their employees. Unlike regimented time-off approaches (think pre-pandemic), PTO policies now combine vacation days, sick days, personal days, mental health days, volunteering, and more.

But there are downsides to this for both employees and employers. Even before the pandemic, employees left enormous amounts of unused PTO on the table: 55% of Americans, to be exact. [1] The reasons vary – in a tight job market, many feel pressure to show “loyalty” to a company by not utilizing all of their PTO. Others simply lose track of the days. These situations not only add pressure, stress, and burnout but also incur a financial cost.

According to a study by Oxford Economics and Ipsos for the U.S. Travel Association, American workers fail to use hundreds of millions of vacation days, equating to billions in lost benefits per year.


In 2015, companies like Netflix and GrubHub made headlines when they offered unlimited PTO to provide a better work/life balance – something 78% of employees say they crave. But this perk comes with its own set of advantages and disadvantages.


Improved morale

Implementing an unlimited PTO policy shows that you value your employees outside of work by caring for their mental and physical health. This can lead to improved morale and a positive work environment.

Better recruitment and retention

In today’s competitive job market, it takes more than a paycheck to attract and retain top talent. Unlimited PTO demonstrates a company’s commitment to balancing work and personal life – a priority for many job seekers.

Elevated productivity

When employees have the freedom to take time off as needed, they’re also more likely to feel trusted and empowered to do their job – and do it well.


Potential for abuse

Generally speaking, employees use unlimited PTO responsibly. But there’s always the potential for abuse (as in taking large-scale liberties to show up for work sporadically). This can lead to problems like decreased productivity, higher absenteeism, and resentment amongst peers who are pulling their weight.

Potential impact on the business

Unlimited PTO can create a problem if employees request time off during peak periods that were previously restricted. Too many employees on leave, and too little help on deck, creates internal conflicts and external hiccups.

PTO is no longer an incentive

An unlimited PTO policy hampers its use as a reward. Since employees can no longer earn extra vacation days (it’s now standard and expected), companies need to find other ways to differentiate themselves and their corporate culture.


Two years of working remotely has led workers to covet personal freedoms like flextime and individual wellness. Let’s consider a range of other workplace benefits set to dominate 2023.

Medical coverage

This remains the most common, albeit necessary, employee benefit. It typically covers costs associated with doctors’ appointments, regular checkups, and basic medical procedures. But all coverage is not created equal. Take the time to discover what healthcare benefits matter most to your staff so that you can extend the best choices.

Dental and vision insurance

While some employers provide dental and vision as part of an employee medical plan, this coverage is often a separate benefit. Taking a well-rounded, holistic approach to your employees’ health further demonstrates how much you value their contributions.

Mental health coverage

These plans may cover appointments with mental health practitioners, behavioral and cognitive therapy services, and counseling. Additionally, coverage may also include prescriptions. This area has received a great deal of attention in recent years, and small businesses may be wise to listen and adapt.

Retirement planning

Retirement options are another great way to show an interest in your employees’ long-term well-being. Plans vary depending on the employer, but some of the most common include 401(k) and IRA plans and simplified employee pension (SEP) plans. 403(b) retirement plans are available for those working at nonprofit organizations.

Remote work flexibility

This is a big one. In fact, it has become a deal breaker for many potential employees when considering a new position. Whether it’s treated as a perk (allowing employees to work from home one or more days per week), or as a more structured element of the position (allowing employees to choose their own hours and schedules), this flexibility is one of the most important factors you can address when examining benefit options.

Converting PTO

Another way companies are modifying time-off policies is by allowing PTO dollars to be rolled into other benefits – such as health savings plans, student loan payments, employee emergency funds, or early wage access.

Certainly, every organization has unique needs, and you must create a time-off policy that works best for you and your employees. At Health & Benefits Partners, we’re here to help you make the most of your benefit plans. If you’d like to discuss better ways to serve your employees, reach out today.



[1] Zippia, “50+ Telling Paid Time Off (PTO) Statistics [2022]: Average PTO in the United States” Aug. 18, 2022