REVIEWED BY
Alyssa Rhoda | Jul 18, 2022

If you ask Malissa Clark why she studies burnout and workaholism in the workplace, she’ll tell you about her first job.

Fresh out of college, Clark devoted herself to the role of a sales representative for a small printing company. The company struggled financially and, as one of the main providers of revenue, she never felt like she could afford to take a break. So, she worked long hours and would occasionally come in on weekends to make sure projects went smoothly.

Eventually, her compulsion to work gnawed at her, creating a pit in her stomach any time she thought about work until eventually, she had enough.

What Is Absence Management?

Absence management is the set of policies and procedures a company relies on to mitigate frequent employee absences, or absenteeism, that leads to lost productivity and revenue. It usually includes a PTO policy, tools for tracking employee time off and allotted sick leave. 

“I felt myself feeling less and less motivated to work,” Clark said. “It wasn’t so much that I wasn’t doing my job, but I felt like the other things running through my mind made it so what used to be fun was turning into torture.”

Clark became a workplace psychologist so she could help shed light on the dangers of overworking. It’s an experience she sees a lot of workers going through today, especially in fast-growing tech startups.

This compulsion to always be working, or workaholism, is a mindset that companies and our culture exacerbates, Clark, who’s an associate professor of industrial-organizational psychology at the University of Georgia, said. Remote work and the pandemic has only exacerbated those tendencies.

“[In the United States,] we have the stereotype of the ideal worker. It’s ingrained in a lot of us, too, from living in our culture and being told, ‘Pick yourself up by bootstrap. If you work hard enough you can accomplish anything,’” Clark said. “It’s this cultural expectation of the ideal worker that a lot [of] organizations might unintentionally continue to reinforce.”

For a long time, companies have had a tenuous relationship at best with employee absences. Of course people needed breaks, but it was considered something that needed to be managed to maintain a productive workplace. That thinking has started to shift in recent years as companies adopt unlimited PTO policies and other wellness benefits to compete for new hires and reduce turnover.

While this is better for employees, it is up to company leaders to take a fresh approach to managing those absences if they want to reap the full benefits of PTO.

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Unlimited PTO Has Changed the Way Employers Manage Absences

Several years ago, Chelsea MacDonald worked on an internal study on overtime that challenged her assumptions about work performance. Her hunch was that the people who worked the most overtime and took the least amount of vacation must be the most productive employees because they’re so dedicated to their job.

It turned out that those employees weren’t more productive. While they didn’t take vacation days, they took more sick days on average, which are harder to plan around.

What MacDonald’s study tapped into is the cost of presenteeism, which is a mentality that equates being in your seat with being productive. It’s a behavior that companies often inadvertently reinforce through fixed PTO policies and absence management plans.

4 Tips for Managing Absences With Unlimited PTO

  • Set appropriate guidelines. 
  • Track absences.
  • Create continuity plans.
  • Create opportunities for employees to try out new roles.

With a fixed number of days off and the opportunity to bank unused PTO for bonus paychecks, employees had to weigh whether or not taking time off was worth it. Taking a day off for a doctor’s appointment or to give yourself a break after a busy stretch came at the cost of your vacation time. And if you ran out, too bad.

It created a workforce more focused on attendance than productivity, which can erode employee engagement and mental health, said MacDonald, who’s now the SVP of Operations for brand interactions software company Ada.

“I don’t think humans are lazy, but we are very busy, so we sometimes do the easiest thing,” MacDonald said. “If the easiest way to show I’m good is to stick my butt in a seat for long periods of time, then that’s what I will do.”

But the rise of unlimited PTO has introduced a more nuanced conversation around absences. 

 

Understanding Different Types of Absences

Unlike the old way of thinking that all absences are bad, there are actually two different types of leave: planned absences and unplanned ones, according to Nick Gallimore, director of innovation for human capital management at Advanced. 

Planned absences, which include paid time off for things like vacations and mental health days, are scheduled in advance with a manager. These are valuable to the company, as they create opportunities for the employee to rest and recharge. Unplanned absences, which involve sick days and situations where an employee calls off work unexpectedly, are the ones companies want to avoid. 

When an absence is planned, employers can develop coverage plans for the employee and coordinate them around project deadlines and targets. Research also shows that employees return to work more engaged, energized and creative after a vacation, Clark said. But it’s also important to note that those effects wear off over time.

“You really need more frequent vacations scattered throughout the year,” Clark said, touting the benefits unlimited PTO provides in that area. “It doesn’t have to be a two-week vacation where we’re traveling around the world. Even little vacations can give you that refresher you need.”

And while employees who don’t take vacations may rack up more work hours, they’re more likely to experience health-related issues that lead to increased sick days over time. Those unplanned absences are trickier to handle and end up costing employers approximately $2,660 per salaried employee each year, according to a study by Circadian, a consulting company that helps employers manage staffing and work schedules. 

“You saw people get burnt out all the time ... Because it’s an accrual policy, no one is really watching it, no one is monitoring it.”

While unlimited PTO might seem to open the floodgates for rampant absences on the surface, it actually gives employers more levers they can pull to prevent unplanned leaves that come as a result of presenteeism.

At fintech company Emburse, Chief People Officer Danielle Tabor said vacation time often went overlooked under its former fixed PTO policy. Managers noticed when an employee ran out of hours, but not if they hadn’t taken time off in years. Employees, meanwhile, tended to hoard their days off for bonus paychecks, and took more sick days instead.

“You saw people get burnt out all the time,” Tabor said. “Because it’s an accrual policy, no one is really watching it, no one is monitoring it.” 

When the company shifted to an unlimited policy, which it calls “Take what you need,” the question shifted from “Do you have enough time off?” to “Are you taking time off?” The latter has allowed them to make sure employees are scheduling PTO in advance and preempt those surprise days off.

The same holds true at Ada. Whether an employee needs to stop work early to go to their child’s soccer game or needs a week off to recharge, they can. In exchange, MacDonald said, they’re responsible for meeting their productivity targets and planning the time off in advance with their manager — even if it’s just a day’s notice.

It’s all part of a shifting culture and a realization that people need flexibility in their workdays as they work from home. Parents might need a day to tend to their sick child; another worker might simply need a mental break.

Absence management can’t be the rigid system it used to be, with a focus on fixed work hours and PTO, according to Bernard Coleman, chief diversity and engagement officer for HR platform Gusto. Unlimited PTO has forced those employers to be more empathetic to the needs of employees.

“The old ways felt rigid where ‘This is what you have,’ but life operates in the gray,” Coleman said. “So having flexible leave, the person can say, ‘Thanks for being flexible with me because I needed this time,’ or, ‘Hey, we have that flexible leave because you need that time.’ It creates that conversation.”

 

How to Manage Absences With Unlimited PTO

There are three things MacDonald talks about constantly at Ada: empathy, results and vacation.

New people are often afraid to take a vacation in unlimited PTO workplaces until they understand how the company views it, MacDonald said. They’ll look to leadership and their colleagues and follow their lead. So, her job is to make sure there’s no doubt in that person’s mind about how the company views vacation, which is: “Take it please, my god.”

But you can’t just tell people to take time off as they need it and expect them to listen. It has to be woven into the culture, otherwise, it’s just lip service, she said.

“Unlimited PTO is a scam unless your culture makes it real,” MacDonald said.

It starts at the top, where MacDonald frequently nudges executives to take vacations and share it with the company. She considers the time she got one of the company’s sales leaders to take their first vacation in four years her crowning achievement. When leadership takes vacation, other employees will follow their lead, MacDonald said.

“Unlimited PTO is a scam unless your culture makes it real.”

MacDonald and the leadership team also reinforce the idea that everyone needs breaks to do their best work. It’s a simple way to remind people that PTO isn’t considered taking away from company time but rather a necessary factor in remaining a productive employee.

“In order to show up to work you need to be in the right headspace and you need to be rested,” MacDonald said. “Sometimes you need to take a break. Taking a break has been scientifically proven to get your brain working in a new pathway. So, if you’re stuck, maybe the right thing is to take a couple days vacation.”   

Of course, for the policy to truly work, the company also needs to have a strategy in place for when people go on those breaks. The work still has to get done, and it will often fall on the shoulders of the employees still in the office.

If you aren’t prepared for those absences, you’ll end up with burnout and turnover.

So how do you balance the flexible time off promised in an unlimited PTO plan with work demands? It requires a revamped absence management plan.

 

Set Appropriate Guidelines

Despite the name, unlimited PTO doesn’t mean employees can take off whenever they want for however long they want.

This is where guidelines and trust come in.

You can’t micromanage PTO, only approving it when it suits you as a manager, Coleman said. When a person takes time off, you have to trust that they’re taking into account their workload and business needs. Otherwise, it’ll feel more restrictive than a fixed PTO policy.

“I always want a bit of autonomy on my team and I want trust,” Coleman said. “Once they know the policy, you establish the guardrails, you talk about everything and they have a clear sense of what is and isn’t allowed, then you should just let them do it.”

The best way to establish that trust is to lay out what your PTO expectations are as a company. The policy should outline when business needs supersede time off requests, when requests need to be submitted and the process for approval.

Noting that project deadlines and busy seasons will be taken into consideration when time off requests are considered helps employees plan their own vacations around the company’s needs. 

You can still be flexible in your policy. For short-term requests, Susan Stick, Evernote SVP of people and general counsel, said a day or two of notice is often enough for the manager to prepare for the absence. If the request is a week or longer, she recommends setting a minimum week or two-week notice.

“People are encouraged to tell others as soon as they know, but it’s not a culture where you have to tell everyone [why you need time off],” Stick said. “All you have to do is tell me, ‘I’m busy the morning of October 18.’ What I care about is that you’re doing your work and you’re meeting your milestones. When and how you do it is up to you.”

That way, when a person requests three weeks off during a key deadline or in peak busy season, you have grounds to enforce the guidelines. That could mean asking the person to take fewer days or waiting until after the deadline. 

“There’s this weird sense for some people that you get this unlimited plan, and they think, ‘It’s unlimited, so there are no guidelines, which means I can’t take it,’”

Employees are often willing to adjust and self-regulate based on the needs of their team, Coleman said. Just make sure to also encourage PTO when there are slow periods.

Creating a set of guidelines is also an important way to ensure your vacation policy meets state legal requirements. States are still trying to make sense of unlimited PTO policies, said employment law attorney Guillermo Tello, who’s a member at Clark Hill law firm. But in 2020, California became among the first states to touch on the legality of unlimited PTO with its McPherson ruling

The court ruled that unlimited PTO policies can no longer be an informal or undefined offering. Employers in California have to write down and articulate when and how time off requests will be submitted, what goes into the approval process and what the employee’s rights are under the policy, Tello said. Any company that breaches it would be required to pay out vacation wages when the employee leaves.

Ultimately, these guidelines make it easier for your company to plan for absences and reduce their impact on the business. But they also give employees a framework to follow that makes it easier to determine when and how they want to take vacation.

“There’s this weird sense for some people that you get this unlimited plan, and they think, ‘It’s unlimited, so there are no guidelines, which means I can’t take it,’” said Tabor, chief people officer at Emburse. “So, you have to put guidelines in there that there’s a minimum you [should] take, and we’re making sure you take it.”

 

Track Your Absences 

One of the biggest mistakes Gallimore, of Advanced, sees companies make after adopting an unlimited PTO policy is assuming it means they don’t need to track absences anymore. But failing to track PTO removes one of the most effective absence management tools.

At a minimum, recording PTO alerts leaders to who is going to be in or out in a given week. But it also brings attention patterns of unplanned absences, which could signify that an employee is going through burnout or experiencing a personal issue. Managers can’t have those important conversations unless there’s a system in place for tracking and talking about absences, Gallimore said.    

“It’s about having a culture of an organization that’s actually recording and talking about absences,” Gallimore said. “So generating not only the absence volume data but the underlying reasons why somebody has been absent is a cultural piece we often overlook.”

Tracking time off doesn’t have to mean reducing the flexibility unlimited PTO affords employees, either. 

At Klaviyo, Global Head of Integration Talent Lisa Maronski and her team run data reports on PTO about once a quarter. The purpose isn’t to police the amount of time off people are taking, but instead, to make sure people are using it.

They start at the team level, looking at how much PTO each team has used and then drill down to the individual level to see where there are gaps. If only a small percentage of the team took time off in a quarter, they’ll flag that for the manager. It’s a way to identify people who might be at risk of burning out and encourage them to plan time off. 

“If you’re not measuring absences, how do you know if you’ve got a burnout problem? ... You might argue ‘We’re asking everybody how they’re feeling.’ … But fundamentally, where that problem will manifest is in long-term absences.”

“We run it by function, and then we ask their HR business partners to work with their functional leaders to look at the health of their organization and make sure that people are balanced and taking time off,” Maronski said. “You’re a happier employee and a better employee when you can step away and enjoy other aspects of your life.”

Absence data can also help you see company-wide PTO patterns. People tend to be relatively consistent with when they take chunks of vacation, Maronski said. Most people tend to lump their vacations in around the holidays and summer months, but parents on staff might also group PTO around their child’s school calendar. Other teams, like finance or sales, might be incredibly busy in the fourth financial quarter, so they may lump their vacation time the following quarter.

Knowing when those periods are, you can send reminders to employees to start planning and requesting their PTO for those seasons a few months in advance. The earlier the requests come in, the more flexibility managers have, MacDonald said. They can set up coverage plans and work with employees to try to stagger the dates if it overlaps with a project deadline.

It helps prevent situations where the entire team takes off at once, leaving just a few employees behind with a mountain of work.

Understanding your employee PTO patterns can also help you identify when there are deeper absence issues, Gallimore said. If an employee starts requesting frequent chunks of time, it could signal that they’re experiencing burnout, a health issue or looking for a new job.

Tracking absence data can help managers identify those situations and talk to the employee about it. Those conversations could help you prevent future unplanned absences or turnover.

“If you’re not measuring absences, how do you know if you’ve got a burnout problem?,” Gallimore said. “You might argue ‘We’re asking everybody how they’re feeling.’ … But fundamentally, where that problem will manifest is in long-term absences.”

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Create Continuity Plans

One of the benefits of unlimited PTO is that people have the freedom to go on longer and more frequent vacations. If someone wants to take a week for themselves to reset, they just have to schedule it. And if they want to backpack through Europe for two weeks, they can do that, too. 

While most teams are equipped to cover a day off here or a couple of days there, those longer absences can be difficult to handle. If you don’t plan properly, their workload can either fall through the cracks, derailing a project, or overwhelm team members picking up the slack, said Tim Rowley, CTO and COO for staffing agency PeopleCaddie.

“The last thing you want is to have cascading failures,” Rowley said. “If employee A is out, the work falls on the shoulders of employee B. That person endures it for a short period of time, but then they get stressed and frustrated so employee B leaves. Now you’re down two employees and it continues to build.” 

That’s why it’s important to establish a continuity plan for each role. It starts with having a clear organization chart with defined responsibilities. You want to make sure there aren’t any single points of failure or situations where only one person has knowledge of a specific task, Rowley said.

Start with having someone in a similar role take over some of their responsibilities, but if that’s not possible, then select a person to be cross-trained for their responsibilities.

From there, make sure the employee going on PTO sets up an out-of-office email with a secondary point of contact for urgent inquiries, shares access to any documents they’re working on and wraps up any timely work before they leave.

If the vacation is longer than a few weeks, then it may be worth considering a temporary worker to cushion the workload on the staff, Rowley said. 

But what if it’s the manager leaving? If a manager is going to be out for an extended period, they should leave a written plan of everything that’s currently in motion that their replacement needs to know, said Stick, of Evernote. Though it’s important for a manager to lead by example and shut down on vacation, it can help to leave a phone number their replacement can call in case of emergencies.

People almost never use it, but it gives them the confidence to know they have the option, Stick said.

Most teams should be able to absorb occasional PTO requests, she added. If they can’t, then it could be a sign that you’re understaffed or have bottlenecks in your organization.

 

Create Opportunities for Employees to Try Out New Roles 

One of the hidden perks of paid time off is that it creates opportunities for employees to try out new roles.

If a team lead is out, it could be an opportunity for a high-level junior employee to assume some of their leadership responsibilities. Maybe that means they run the team meeting that week or take point on a project presentation.

At Ada, MacDonald likes to give someone on her team the opportunity to be her whenever she goes on vacation.

Allowing employees to take on new responsibilities for the absent person is a great way to develop your staff and keep work on track, MacDonald said. It also discourages the burden some managers may feel that if they take time off, the company will suffer.

“You should have systems around you to make it easier to get work done if you aren’t there,” MacDonald said. “If you are a bottleneck and always available, you are a problem.” 

The key is to create clear documentation around your work, give other people on the team autonomy to make decisions and leave behind a clear to-do list when you’re out, MacDonald said.

 

Don’t Worry, Employees Won’t Max Out Unlimited PTO

One of the biggest misconceptions company leaders have when it comes to unlimited PTO is that employees are going to abuse it.

If there are no limits, then what’s to stop an employee from taking five weeks off or six consecutive Mondays? Joey Price hears this concern all the time when he consults with small business leaders through his company Jumpstart HR.

He understands it — workplaces aren’t equipped to maximize unlimited PTO. Companies still need people to do the work, which means people can’t take vacation whenever they want as the name implies, Price said. 

“It’s the branding piece. When you go to a buffet and someone says unlimited ice cream, the fear is that you’re going to run out of ice cream because everyone is going to get multiple bowls,” Price said. “There’s the fear that abuse will come because there’s that opportunity.” 

But generally, people don’t abuse unlimited PTO policies, Price said. They respect the guidelines and adhere to the cultural norms they see around them. In fact, a study from Namely found that people take 13 PTO days on average under an unlimited policy, compared to 15 days on a fixed PTO policy. The experts Built In spoke with also said that situations in which an employee has abused the policy are rare.

Still, what do you do when an employee asks for five weeks of vacation that overlaps with a project deadline? Easy, MacDonald said, say no.

Managers tend to have more control than they realize in unlimited PTO, MacDonald said. In fixed PTO, people have hours they can use when they see fit. Without those constraints, managers can have a discussion with the employee and find common ground for a time off request that matches the needs of the team. In most situations, people understand and are willing to be flexible. 

“It’s the branding piece. When you go to a buffet and someone says unlimited ice cream, the fear is that you’re going to run out of ice cream because everyone is going to get multiple bowls ... There’s the fear that abuse will come because there’s that opportunity.”

“If your team can’t handle the six weeks off, you have to say no,” MacDonald said. “You have to be a manager and have a real conversation. Like, ‘It’s an incredible opportunity that you want to backpack in Nepal for six weeks. Is there a way you can make it in three weeks or four weeks so that the team can support it?’”

There are also concerns over an employee taking several chunks of vacation over the course of the year. When that happens, it’s important not to judge their PTO accrual based on what seems fair, MacDonald said. 

It’s a mistake she sees a lot of people make. Everyone has different time off needs to do their best work. Some people go through periods of intense work and need more cooldown time, while others might parcel their workload out and need less time off. Trying to compare the two employees’ PTO hours isn’t fair to either of them, MacDonald said.

If someone has taken an alarming amount of vacation, however, it needs to be evaluated through the lens of productivity. If the person is meeting their deadlines and is consistently a high performer, then there isn’t an issue, MacDonald said.

But if they aren’t, then you need to have a deeper conversation that starts from a place of understanding. Instead of rejecting them outright, Maronski suggests trying to understand what’s going on in their lives. Frequent short-term absences can often be a sign that the person has a health issue, is feeling burnt out or is dealing with a personal emergency. 

“[We’d approach it] more from the capacity of, ‘Are they OK? Is there something going on where we need to give them support for whatever period of time?,’” Maronski said. “But I really don’t see it all that often. People are respectful and enjoy the flexibility.”

If a person truly is taking advantage of the system, then you have grounds to reject future requests based on production.

 

Why You Should Empower Employees to Take Time Off

For all the flexibility inherent in unlimited PTO, the truth is that most employees don’t take advantage of it.

When companies adopt an unlimited PTO policy, employees will always look to the top performers to seek out the cultural norms, Gallimore said. If leadership and the only people you promote are ones who work long hours and rarely take vacation, people are going to imitate them. This can lead to a culture of presenteeism that puts your workers on a fast track for burnout. 

“If you’re not careful, it becomes a subconscious race to the cultural bottom where it can become a badge of honor to say, ‘Look at me, I’m so busy.’” 

The same holds true in environments where employees lack clarity and feedback on their work. If your staff isn’t clear about their performance and responsibilities, they’ll respond to that by taking on more work.

Adding unlimited PTO into environments like that becomes toxic. It removes the clarity of fixed vacation hours and replaces it with uncertainty. Eventually, your overworked staff will start racking up sick days, which are much harder to plan around.

“You’ve got this risk where people start to feel like, ‘I couldn’t take time off because that person isn’t,’ or, “What does it mean if I’m taking more than average time off? Will that be held against me?,’” Gallimore said. “If you’re not careful, it becomes a subconscious race to the cultural bottom where it can become a badge of honor to say, ‘Look at me, I’m so busy.’” 

 

So, How Can You Empower People to Take Full Advantage of Unlimited PTO?

One way is to get creative with the perks you create around your PTO. Evernote pays employees a vacation bonus for taking five consecutive days off. In most situations, people feel comfortable taking a day off here or there but not longer vacations.

But those longer vacations are the times when people are able to fully recharge and come back to their job with a fresh perspective. Creating a perk around it motivates employees to think ahead and schedule time for those breaks.

Other employers, like Emburse, will schedule dates when the entire company shuts down to make sure people take time off.

“When the pandemic hit, we found people weren’t taking time off because they didn’t have anywhere to go,” Tabor said. “So, they just worked all the time and that was a huge problem we had to solve … because people are burning out.” Tracking absence data with unlimited PTO helped Emburse to identify this issue, and the shutdown days gave employees permission to log off and just do nothing without fear of missing important emails or Slack messages. 

If there’s one thing companies have learned these last two years, it’s that employee attendance and productivity isn’t the competitive advantage it once was. People need breaks. You can either plan for those absences or watch employees leave.

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