Unlimited Paid Time Off for Nonprofit Employees: Truly Great or Too Good to Be True?

Unlimited Paid Time Off for Nonprofit Employees: Truly Great or Too Good to Be True?
Spring 2017 by Emily Anthony

PTO

Last year, when Zeno’s Executive Director Julie Marl asked me to circulate a job description for her, I wrote her back as soon as I read it. “Happy to circulate – but it says the benefits include ‘Unlimited Paid Time Off.’  Really!?!”  Honestly, I thought it had to be a typo.   “Yes, ma’am!” she wrote right back. “I put it into place. We’ll see how it goes!  So far so good!”

An organization offering unlimited paid time off to an employee?  It was a new concept to me, but I was behind the times: Netflix, Zappos, and several other large tech-based companies have been offering this for a while, and even the Gates Foundation has recently gotten in on the act.  But Zeno is one of the only smaller, Seattle-based nonprofits I know of right now that is offering this benefit.  Which is surprising when you think about it, because in many ways nonprofits seem like the ideal organizations to make this work: it’s a compelling benefit that they could offer without a huge increase to the bottom line, and small, close-knit teams seem like excellent candidates for having success with a system that is based on mutual trust, responsibility, and shared commitment to a mission.  So it sounded like a great experiment to me.  “Ask me how it’s going again in a year!” Julie said . . . and so I did. Read on to learn how Zeno has made the unlimited PTO policy work over this past year, how the staff feels about it, and a few things to think about if you want to give it a try at your organization. 

Before we go any further, let me make a few things clear: I’m neither an HR expert nor a lawyer, and this article won’t describe all the implications of changing to unlimited PTO policy from a legal or HR standpoint, nor will it give you all the details around what such a policy should include.  What this article will do is give you one “case study” of an organization that has implemented this approach with some success.  So let this be an official caveat:  your own mileage may vary.  And it is always smart to do some research and check with the HR and lawyer types, not to mention your board, before changing personnel policies.

First, a few words about Zeno to give you some context: Zeno’s mission is to increase children’s competence and confidence in math. They serve early learners and elementary school aged children in communities furthest from opportunity, and envision a world where everyone knows they can do math. Their programs serve over 1500 children a year, incorporating games, fun, and play to build foundational math skills.  Founded in 2006, Zeno currently employs 11 team members and has a budget of approximately $1 million a year.

When asked about why she initially wanted to make the switch to unlimited PTO, the Executive Director Julie Marl said, “I came in as a new ED for the organization, and the environment I came into had a heavy emphasis on counting hours, flex time, how much time had been accrued – it was very sophisticated timecard tracking. I wanted to upend that culture, to go to a culture that really valued taking time when you need it, and treating employees like they are responsible for their own values and habits.  My own offer letter did not have vacation time specified, and I did not ask because I assumed I would do what I needed to do. I realized it made sense to treat all the staff as I wanted to be treated.” 

The Zeno Policy

This is a portion of the Zeno policy from the current Employee Handbook:

At Zeno, we believe that a balance in both work life and personal life is important.  To this end, we offer unlimited Paid Time Off for all exempt employees. In order to take time off (vacation or other personal reasons), employees must obtain prior approval from their supervisor for three or more consecutive days of PTO.  Approval of an employee’s request for time off will be based on the supervisor’s review of appropriate business considerations, including the needs of the employee’s team, the employee’s work performance and workload.  Although PTO will be unlimited, Zeno will track employees’ use of PTO.  To that end, employees must notify Zeno by email of PTO used.

Operationally, here is how Zeno puts the policy into action, according to ED Julie Marl:

  • I require that employees (both full time and part time) indicate on their shared Outlook Calendar when they’re available.  This is important for two reasons:
    • Respectfulness to the rest of the team so that meetings can be scheduled via the calendar (without having to ask each person if they are or aren’t available)
    • Transparency as to when people are and aren’t working
    • Respectfulness to the employee, so that people don’t try to track someone down if they’re “Out of office” (respect of personal time)
  • If it’s 3 or more days, the employee submits the request via the HR software we use and the request is sent to the supervisor. I’ve coached the team that before the request comes through they need to have checked with their teammates to make sure the date works all around (so that work is covered and nobody’s left in the lurch).

Julie admits that it was a little bumpy when she first introduced the idea of unlimited PTO. Like any big change, it took time for the staff to wrap their head around the idea – and even now, she says most people that she tells about it think she is “a little bit crazy” and don’t understand how it can work. Many articles about unlimited paid time off suggest that it is bad for employees because there ends up being a culture of never taking vacation – in other words, the real policy feels like, “you can work whenever you want, as long as it is all the time.”  Julie counters, “Everything is dependent on how the organizational culture supports the policy and leadership modeling is especially critical” and adds that the cultural pieces take some intentional investment.  When I asked Julie what the culture needs to look like in order for this to work, she highlighted three factors:

  • Leadership must model taking time off and really being off.
  • Leadership must model respecting others when they’re off (and not call/email/text/IM or nag in any way when someone is off). 
  • Leadership must develop strong aptitude for setting expectations, holding employees accountable, and a robust ability to coach team members.  These are “no-duhs”, but are also skills that are often weak or not present on many teams. 

She is adamant: “If any of these three items aren’t in place, I don’t think unlimited PTO will work.” And she admits that even when those are in place, the policy takes adjustment. Many employees feel guilty when they take time off, even when it is supported in the culture. Julie says that for that reason, she encourages tracking the PTO and checking in with employees who are not taking it to individually encourage and support them in taking time off.

The Staff Reaction

Michelle Gnuschke, Zeno’s Program Manager who has worked there for many years, agrees that she was uncertain when she first heard the new policy “because it sounded too good to be true. At staff meetings, Julie had to go over it and over it.  . . . It was so different from what we were used to, it took a while to shift our thinking.” Once she realized Julie was genuine about the desire to see Zeno staff take time off without guilt, Michelle was excited about the change, and says it has changed how she experiences her time off. “Having an admin that values flexibility in our time and allows us to make use of that benefit without feeling guilty is a really good thing.” 

Tarhata Guiamelon, Zeno’s Product Manager, was hired after the change was already in place. She said knowing about this policy was a major factor for her in considering the job. The policy appealed to her both because of the flexibility it offers her and because it said to her that Zeno was a place that really values families and isn’t afraid to do things differently. She said the culture at Zeno is “ ‘Take the time you need – it’s OK.’  It was a huge draw for me because in a for-profit position I would be paid more, but this is a real value for my family.”  The staff also mentioned the ability to take time off in the first year without having to wait to accrue a lot of hours, the ability to occasionally plan for longer vacations, and the fact that you know you can take a break after a particularly busy period, as things they really appreciate about the policy. “They can seek out adventures, and do things that will expand their experience,” says Julie. “And we can make taking care of ourselves a priority.”

But what about the work?

OK that all sounds great, but how do you make sure the work actually gets done on time if there are no limits on time off? Everyone I talked to at Zeno assured me that is really not a problem, because people take their work seriously and act responsibly.  “No one has abused the policy,” says Julie.  Michelle told me, “I’m not sure how it would work in a larger setting, but in a small organization it’s ideal. You know when someone is not getting work done, they can't hide behind it. We all believe in the mission, so we all do our work.”  Tarhata similarly told me. “You really need to know your staff and trust them -- at Zeno we really want to scale and grow. . . . We have clear lines of work, so things are defined pretty well. I think it is successful because of transparency and communication.”  

Research from other companies backs them up.  MammothHR, a HR technology company based in Portland OR, studied unlimited paid time off for a year and found that their employees took just about the same number of days off per year that they did before the change to unlimited PTO. Despite this, Mammoth employees still rated it as one of the very best benefits that the company offered.  Why, if they didn’t actually take more vacation? Employees said it was because the policy showed that the company valued them as individuals, trusted them to get the work done, and understood that sometimes things happen in life that require our attention outside of work. (You can read more about Mammoth’s unlimited PTO experiment and advice about how to implement it here.)

So is there any downside to the unlimited PTO policy at Zeno? The staff was hard pressed to think of one, with the exception of the fact that if you leave suddenly there is no “vacation payout” as is traditional at other jobs.  Additionally, all staff did caution that you still have to plan for your time away, document what you are doing, and communicate about how you will get your work done on time – “unlimited” really doesn’t mean you only show up when you feel like it, and you never have to think twice about taking a day off.  In fact, “Unlimited Paid Time Off” may not be the best name to describe the policy.  At MammothHR, the CEO said he didn’t like the name because “ ‘unlimited PTO’ emphasized self-indulgence when our team is actually guided by principles of professionalism and collaboration.” ED Julie Marl points out that the unlimited PTO policy means that expectations about what it means to get your work done have to be clear, and supervisors and team members need to be able to talk about conflict and performance problems, which is not always easy. Julie wonders if this will still work as well as the organization grows, and she says that the policy has not been tested yet with “outliers”, such as a request for a very long leave, or an underperforming employee.  Nonprofit Notes may need to talk to them in another year to see how that all plays out!

Despite these caveats, Julie and the Zeno staff I talked to consider it a success and would recommend more nonprofits explore the possibility of offering this special benefit. “You can’t just put it in place and assume everything will be roses,” Julie warns. “It takes work to intentionally create the culture you want to create.”  I would argue that nonprofits doing mission driven work are up to the challenge of defining their values and reflecting those values in their culture, policies, and practices.  The Zeno policy is grounded in their belief that taking care yourself, finding balance, and yes, having fun really matters, and the best work will happen when people are able to do those things. And because they are all grown-ups who care about the mission and who appreciate working on a collaborative team, the work gets done. As Michelle put it: “It’s not like people are never there -- the office still functions the same as it used to.  I just think we're probably all a little happier.”

Do you have questions about how unlimited PTO really works, or have you tried this at your organization? Leave your questions and comments here and we will try to respond! 

Comments

When I was recently hired as Executive Director at Highline Schools Foundation, a small non-profit organization, I was very pleased to see in my contract what they refer to as "executive benefits" which states that I am not subject to a set number of vacation days or personal time off days per year. The policy is set up to allow me to take vacation at-will. My responsibility is to coordinate days off and vacation time with the annual calendar to ensure that no time it taken during Foundation events, unless agreed in advance. With the crazy hours of an executive director, this gets me away from thinking about the number of hours I am putting in as I know I can just take time, as needed, to handle any personal business. I really appreciate this treating of me as a professional and the thought that I could be trusted to get the job done while still having a life outside of work.

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