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PTO at a Tech Startup: Why Shift5 Gives Unlimited

Josh Lospinoso November 9, 2021

At Shift5, we’ve had unlimited paid time off since our inception. Our unlimited PTO means our teammates can take as much time off as they need, for whatever reason, so long as they’re delivering. We chose this policy deliberately because it aligns with our culture and it’s simple, safer, fairer, and more inclusive.

No time-off system is perfect. Compared with traditional PTO, where employees accrue a set number of days per year, unlimited PTO can lead to employees taking too little leave due to peer pressure. It can also lead to abuse where employees take so much PTO that they’re not effective.

In this blog post, I’ll describe why we’ve chosen unlimited PTO, how we’ve evaluated its strengths and weaknesses versus traditional PTO, and how we think about mitigating potential problem areas.

Unlimited PTO aligns with our culture

We don’t judge each other based on how much time we’re in the office or available on Slack. We judge each other based on the results we deliver. We promote goal-driven attitudes and efficiency over formalisms and appearances. We value function over form.

If a teammate is thriving and delivering, we celebrate it. There is no single right answer for balancing work and life demands. People who are delivering should feel trusted and empowered to make good decisions in all aspects, and when they choose to take time off, it is no different. We don’t view intense scrutiny over PTO process as consistent with trust and integrity. (Integrity is a Shift5 core value.)

We are not concerned about unlimited PTO abuse: our view is that if a teammate is abusing PTO, it will manifest itself in work performance. Bean counting PTO hours is lazy leadership. PTO accounting is irrelevant so long as employees are thriving and achieving their goals.

Unlimited PTO is simple

Traditional PTO is a mess. It places an unhealthy emphasis on process rather than freedom and trust. When do you take a sick day versus a vacation day? How should you manage your balance—go to a friend’s wedding or save time to see family over Thanksgiving? Should you save PTO and accrue into next year? With unlimited PTO you’re empowered to make good judgements about the real question: how do you balance your work obligations with your personal needs?

Unlimited PTO is safer

When you have limited sick days, you have a perverse incentive to protect your balance by working even if you’re not feeling well. If you’re not remote, it’s even worse: you’re incentivized to come in and potentially get your co-workers sick. Especially in the era of COVID-19, I believe a limited sick day policy is dangerous and irresponsible.

Unlimited PTO doesn’t care how long you’ve been at the company

Traditional PTO awards increase with seniority. I believe this sends the wrong signal—that the newbies have to pay their dues by flirting with burnout. It also makes PTO feel like a reward or an incentive rather than a crucial part of a healthy work-life balance. Unlimited PTO doesn’t care if you’ve been with the company one year or ten. And it takes PTO off the table as an incentive, forcing managers to be better, more creative, and more impactful in how they reward their team.

Unlimited PTO is more inclusive

We’ve made the decision to take US holidays off. At a philosophical level, this doesn’t make much sense. We have unlimited PTO, so why would we reduce freedom of choice by mandating time off? The short answer is that it would be very weird not to take Federal holidays off. And our judgement is that most people would take these days off anyway.

We’ve found it’s also important for teams to agree on shared days off. Holidays can be especially refreshing as teammates know that their entire team is off. They don’t need to worry about catching up when they get back, or that they may have missed a spontaneous meeting or an important conversation.

Mandating US holidays aside, unlimited PTO is more inclusive to religions and customs that aren’t traditionally associated with US customs and holidays. For example, mandating that everyone take off time between Christmas and New Years, while an overwhelmingly common practice, is much less inclusive than allowing teammates to decide when they’d like to take holiday time. The Julian & Gregorian calendars do not have a monopoly on “new year,” and Christmas is not celebrated by everyone.

Ok but seriously how much time off should I take off?

Unfortunately, there is no right answer.

If that’s unsatisfying, US averages range from 15-20 days per year depending on seniority. So taking less than 15 days plus Federal Holidays is probably not enough.

At Shift5, we look at department-level PTO aggregates at the end of the year to make sure our team is tracking towards healthy levels. This is a backstop to make sure managers are doing their jobs.

Some folks need less time off, and that’s OK. But at least we have a conversation about it, and our teammates know that their management is engaged and encouraging them to take more time off when they need it.

Good managers are all too aware when teammates need breaks. For an effective manager, it doesn’t take looking at leave balances to figure that out.

Unlimited PTO is a tool for fighting burnout

Shift5 is a cybersecurity company. Our industry has a huge skill-gap issue, meaning there aren’t enough people to do the jobs that need to be done. This causes the available folks to shoulder the additional burden. This causes long hours and high stress environments that are a recipe for burnout. Add COVID-19 to the mix, and remote workers feel isolated on top of the long, stressful hours. The physical and mental health struggles of folks working in our industry today are just staggering.

By no means is unlimited PTO a silver bullet to solving these complex issues. But it can be a big help. By removing all the red tape and process around time off, people have less friction putting time off on the calendar. As an extreme counter-example, the military veterans on our team acutely remember having to fill out Request and Authority for Leave forms every time we want to take a day off. It takes time (often weeks) to fill and sign the PDFs, route through the appropriate channels, and receive a signed leave form. Then you need to remember to check pay stubs to ensure that your time off was accounted for properly, as more often than not there are errors. God help you if you need to make an amendment to your dates or destination.

Conclusion

If you’re new to unlimited PTO, try targeting the US average of 15-20 days off. If it feels like too little, take more. If it feels like too much, take less. Ultimately, unlimited PTO works best when you have strong relationships with your teammates and managers. If unlimited PTO becomes a point of contention, there is probably a deeper issue that’s worth exploring.

PTO policies are imperfect, and there’s no one-size-fits-all answer. Among imperfect options, unlimited PTO is the best fit for Shift5’s culture. It’s also simpler, safer, fairer, and more inclusive than the alternatives. We strive to cultivate managers who ensure their teams are using PTO effectively.

In combination with flexible work location, excellent healthcare with fully paid premiums, 401k match, we have found unlimited PTO to be a crucial component supporting our team and their families. These benefits are emblematic of our values and attitude that Shift5 teammates should be trusted and empowered. It can take a little getting used to, but in an effective organization, unlimited PTO eliminates a ton of hassle and stress, freeing up mental energy for people to thrive. 

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