Why we’re taking more days off (our approach to flexible PTO)
Lead with your values, and your policies and employee incentive programs will naturally follow suit.
Written by Charles Rath, RS21 President + CEO
This article first appeared in Fast Company.
We’ve killed the 9 to 5.
Over the past 20 months, the pandemic has kicked rigid workplace structure to the curb and prompted a radical shift in how we work and what we expect from work.
I’m a big proponent of values-driven cultures that prioritize people’s well-being and promote flexibility and innovation. That looks a lot different now than it did just two years ago. The pandemic has reshaped our professional and personal lives, and it’s time to rethink how we create positive work experiences in this new climate.
So, what does the future of work look like? With the pandemic hastening a cultural shift and calls for a new work-life standard — and with more than half of all U.S. workers contemplating leaving their occupations — we need to rethink the foundation of how work is designed and supported.
I recommend making a critical pivot: Don’t put a cap on paid time off.
FLEXIBLE PAID TIME OFF
As the CEO of a company with a disruptive culture, we have been able to experiment with progressive benefits and policies early and often. Most recently, that has meant adopting a model for flexible paid time off (PTO). Employees can take the amount of time off that feels right for them. There is no annual cap.
Because flexible PTO makes business sense, promotes a better balance between work and life, and supports healthy, resilient teams. With a less rigid structure that provides people with more flexibility in their lives, I believe we will be able to innovate and produce more.
Research shows that when workers have a voice in decisions, like where to work and when to take off, they feel more empowered. In turn, there’s a positive association between psychological empowerment and job satisfaction and performance.
The British Journal of Research published similar findings that flexibility enhances team performance, reduces errors, and supports teams in achieving an organization’s objectives.
Additionally, in a recent survey from the Society for Human Resource Management, 78% of respondents in the U.S. said that flexible work policies (e.g., schedules, location) are important factors in an organization’s ability to attract or retain talent post-pandemic.
Retaining talent is huge. In fact, Gallup reported that turnover costs U.S. businesses a trillion dollars. And that’s just the monetary cost. Turnover also affects organizational morale, and it means delays in getting work done and losing talented people.
According to the report, 52% of employees who voluntarily leave say their manager or organization could have done something to prevent it.
Furthermore, it’s an equity issue.
Existing inequities — such as access to childcare, caregiving responsibilities, and pay inequality — have been exacerbated by the pandemic. As a result, a disproportionate number of women, especially women of color, have left the workforce.
Almost two years in, there are still 1.8 million fewer women in the labor force compared to before the pandemic. Flexible policies can help make work more inclusive and responsive to a range of circumstances.
ESTABLISHING A NEW PARADIGM
If you are still using a standard PTO policy, consider taking the following steps to rethink how your organization can support healthy, resilient, and more productive teams with flexible PTO.
1. Define flexible PTO: For my company, flexible PTO does not have a cap and includes everything from vacation and sick days to personal, wellness, and bereavement leave. Holidays, FMLA, and parental leave are separate.
In addition, we set clear performance goals and manage them. Flexible PTO doesn’t mean we’re doing less. Instead, it allows us to manage performance more objectively, and employees are empowered to balance deep work and innovation with their other responsibilities. We anticipate deeper engagement and enhanced team performance as a result of this flexibility and emphasis on goals.
2. Create clear guidelines: Help employees navigate the new system by creating clear guidelines. For example, how will people request time off, how much time can be requested at once, and how much notice must be given to coordinate with colleagues effectively? How will the new system be implemented? Will it be phased in so employees can use their existing accrued PTO first?
Communicate what flexible PTO looks like for your company so employees can effectively manage their schedules, complete projects, and take time off when they need it.
3. Avoid the pitfalls of “unlimited PTO:” To avoid some of the downsides of similarly open “unlimited PTO” policies that can result in people taking fewer vacation days, set a minimum time-off recommendation and make sure people meet it. For example, we recommend a minimum of three weeks of PTO to ensure every employee takes adequate time off.
There will naturally be variations in how much time off people take, but if you notice some employees aren’t stepping away from work to rest and recharge, have a conversation.
4. Double down on your values: Well-defined values should be the cornerstone of your approach to any leadership decision. Leaders drive values, values drive behaviors, behaviors drive culture, and culture drives performance. Lead with your values, and your policies and employee incentive programs will naturally follow suit.
REEVALUATING HOW WE WORK
The pandemic has changed work for good. For employers reacting to higher turnover and lower recruitment in a competitive market, it can be difficult to shift the focus from short-term responses to long-term re-evaluations of how we promote work-life balance and equity in the workplace.
I would urge leaders to focus on supporting healthy, resilient teams by responding to the resounding call for flexibility and recognizing the impact it can have on both employees and your bottom line. After all, if we can promote sustainable employee engagement, we can build more successful and innovative companies.
Most importantly, we can support happy, healthy people who will be empowered to engage more fully in all facets of their lives, performing their best at work and contributing to our communities.
Charles Rath is President & CEO of RS21, an Inc. 5000 fastest-growing data science and AI company and a Fast Company Best Workplace for Innovators.