🔒CT companies use unlimited time-off policies as recruitment tool

With companies competing for talent in a still-tight labor market, some are turning to more generous time-off policies that aim to attract employees seeking a greater work-life balance.

In January, Microsoft announced it was going to start allowing employees to have unlimited paid time off (PTO). The Washington-based tech giant’s “discretionary time-off” policy removes limits on the number of days employees can take off during the year.

It’s an industry perk more common in Silicon Valley among companies, including Netflix, Salesforce and Oracle, trying to lure top tech and engineering talent.

Some Connecticut companies have also embraced the concept, or even been on the leading edge of offering it. ADNET Technologies, an IT, cybersecurity and cloud company based in Rocky Hill, has been offering employees “responsible time off” for upwards of seven years, and Berlin-based Olsen Construction Services gives employees flexible time-off opportunities.

“If we’re going to promote things such as work-life balance, we need to really meet this head-on with our policies,” ADNET Technologies CEO Christopher Luise said. “It’s not ‘choose work or choose your personal life.’ Let’s help each other and find a balance.”

But not everyone views unlimited paid time off as a best practice. David Lewis, CEO of Norwalk human resources consulting firm OperationsInc, said companies that enact unlimited PTO policies often don’t go far enough in requiring employees to actually stop working during their off days.

A recent survey by fintech Sorbet found that the number of paid time-off days allocated to employees in 2022 increased 9% compared to 2019 (to 14.2 days), but that 55% of PTO went unused.

“At the outset, it sounds like an awesome idea,” Lewis said. “The problem is execution — on the one hand you get all this time off, and on the other hand over the last 10 years we’ve become lousier at actually taking time off. We stay connected, keep an eye on our email and are basically carrying a computer in our hands everyday in the form of our phones.”

Work-life balance

Luise said his company’s responsible time-off policy essentially lets employees take off as much time as they want as long as they maintain their expected workload and meet project deadlines.

Olsen Construction Services Vice President Nick Olsen said his company does have a vacation policy in its employment manual, but it hasn’t been enforced or tracked since 2019.

“Basically what the agreement is, is this: make sure your project is covered, make sure you have support from the rest of your team, and make sure it does not affect the way we are working, or our relationship with the client,” Olsen said.

If those criteria are met, then vacation time is approved.

“When you come to work for us we understand that Olsen is part of your life, but it shouldn’t be your whole life,” he said.

Olsen said a flexible paid time-off policy can be used as a hiring tool to recruit talent that might be looking for a company that offers more free time away from work. He said other construction firms are often “old school” in their thinking when it comes to supporting employees.

“It’s part of being competitive — how do you hire the best talent when you’re a mid-size construction company? Fortunately, I think the construction business is somewhat archaic in the way they do offerings and they haven’t really adapted, but we have,” Olsen said. “I don’t think there are too many other companies in our industry who offer that.”

ADNET requires employees to take at least 14 days of vacation annually. Luise said his company wants to ensure employees don’t miss out on their “bucket list” of things they want to do outside of work.

“I’m going to actively not just encourage a work-life balance, but I’m going to mandate it,” Luise said, referring to conversations with employees. “I’ll lock you out of the building if I have to — you’re working too hard, I need you to be fresh.”

Olsen shared a similar sentiment.

“We want you to be able to maximize the time that you have with your friends and family — we don’t ever want you to feel that you can’t do something because you’re in fear of not getting paid,” Olsen said.

Theory vs. practice

Lewis, the HR consultant, said that unlimited paid time off is often better in theory than practice and it can sometimes create workplace culture issues.

“Instead of your company tracking your PTO, your coworkers do. That’s the most problematic part of this in my view,” Lewis said, adding it could create a negative workplace vibe.

“It’s a sucker bet, it’s a marketing ploy, it’s a false sense of commitment by the employer to work-life balance for many, not all companies, but many,” Lewis said.

Another issue, Lewis said, is companies offering unlimited PTO on paper but “not having the appetite” for it when an employee actually takes advantage of it. Having a set number of paid days off as part of the policy removes that gray area.

“How much is the right number of days to take off? How much is too much?” Lewis pondered.

Luise said there were growing pains when ADNET rolled out its PTO policy. Employees that had been at the company for several years and accrued more vacation days than their peers were initially skeptical.

“There was an entitlement issue that we really had to get through, and we did,” Luise said. “We just leaned into” the notion that “we’re being fair to everybody here, and we’re going to be fair on the very first day you start.”

He said employees usually take off a few days to a week more now than they did prior to the policy being implemented. Only one employee has taken advantage of the benefit to the point where human resources got involved, he added.

Olsen said that, even without tracking time off, the typical employee takes about two-and-a-half weeks of vacation annually. Olsen Construction has some workers who take closer to a month off, but most employees stick around the average.

And flexible time-off policies don’t mean all vacation requests are approved.

“They won’t take a vacation when they know we’re closing a project out and they need to be there, but they may take vacation the next week, or the next month, and go for three weeks,” Olsen said.

So, could some form of unlimited PTO become a trend among Connecticut employers? Olsen said “smart” companies will adapt to acknowledge the importance of work-life balance that employees increasingly desire, especially younger generations.

Luise said he does think the policy can be used as a recruitment tool, but it’s important for companies to have work-life balance “ingrained in their DNA,” and not just used as a marketing ploy.

“If you want to have a strong workforce culture, you have to think outside the box,” Luise said.