Microsoft to offer unlimited time off for US employees
- Reference: 1673534716
- News link: https://www.theregister.co.uk/2023/01/12/microsoft_unlimited_time_off/
- Source link:
"How, when, and where we do our jobs has dramatically changed," wrote Kathleen Hogan, chief people officer at Microsoft in a memo to staff, reported first by [1]The Verge . "And as we've transformed, modernizing our vacation policy to a more flexible model was a natural next step."
Starting next week, the company is saying goodbye to its four-weeks-a-year policy for US-based salaried employees. Workers will be given 10 days of corporate holidays, alongside unlimited leave. They will also be allowed leave for sickness, mental health issues, bereavement and jury services.
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New Microsoft employees will not need to wait to accrue holidays.
[3]
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Anyone with unused holiday entitlement will receive a one-time payment for this in April, Microsoft confirmed. Contractors paid by the hour will not be subject to this policy.
The move isn't unique: it brings Microsoft in line with LinkedIn, which it purchased for $26.6 billion in 2016, and a raft of other big businesses including Oracle, Salesforce, Goldman Sachs and Netflix.
Controversial
Unlimited paid time off (PTO) is seen as a "very controversial topic" by some tax advisors and the "outcome of such a policy heavily depends on the company's internal environment and execution," said website [5]John The CPA .
Tech mills that grind all they can out of staff – think Twitter 2.0, for example – may not view staff positively if they ask too often for discretionary leave.
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For companies that do press ahead with unlimited time off, including no paid time off liability on the balance sheet, there are no tiered policies and less maintaining of financial and HR schedules for PTO hours.
[7]Microsoft fixes Windows database connections it broke in November
[8]Microsoft to move some Teams features to more costly 'Premium' edition
[9]Microsoft may be counting out $10 billion to inject into OpenAI
[10]Microsoft boosts Azure networking, storage with composable infra grab
The topic is being hotly debated on [11]Hacker News . One commentator said: "All they do is benefit the company through removal of a liability in terms of PTO hours from the company books. The workers are very likely to face social pressures when taking time off when it's viewed as an approval bestowed by management and not an entitlement inherent to the agreement when you started working."
They added: "I don't have any hard data to back this up, but my personal intuition suggests this will result in companies saving money because workers will take less time off and won't get paid out for remaining balances when they quit. This is a very worker-unfriendly policy and in a just system would be illegal."
Another said that if a corporation "shoves enough 'critical work' down your throat, a manager will not be able to say yes [to discretionary time off]. So the corporation is in control of the amount of time off by setting unrealistic deadlines/workloads."
On [12]Blind – billed as an anonymous community app for the workplace – the point was made that PTO is retained on the accounting books under compensation, added to the cost of labor.
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"The company can't spend that money on anything else. Unlimited PTO has no accounting value, meaning the company is free to use that money for other things. Say you have a 100 employees with wages at $100/hr and they have 4 weeks vaca (160 hr), that's 100*100*160 = $1.6 Mil locked away. If you go to unlimited PTO, that's 1.6 Mil the company can spend on other things."
A fast track to stress and burnout? Possibly. As John The CPA concludes: "Good HR departments will keep track of the amount of leave taken by individuals under the new policy and compare it to the old policy to see the changes in employee behavior and how it can affect the organization."
Happening more and more
The popularity of such policies is growing, however. Job seeker site Glassdoor said in a [14]report in July 2022 that more employers are offering unlimited paid time off and employees are asking for it. The share of benefit reviews mentioning unlimited policies increased from 3.7 percent in 2017 to 10.7 percent last year and 88 percent of employee reviews of unlimited time off policies in 2022 were positive.
The outcome of this shift can be a mixed bag for employees. It may help with managing the work-life balance and boosting morale. However, it also creates an environment with unclear expectations and puts the onus on employees to determine how much time to take off, which can lead to scheduling conflicts and workers being guilt tripped into pulling back on vacations.
According to recruitment services firm Zippia, employees at companies with discretionary time off policies often take [15]less time off than those at organizations with traditional paid-time-off benefits, which can lead to more worker burnout.
A Microsoft spokesperson stressed that the policy only applies to US salaried staff. ®
Get our [16]Tech Resources
[1] https://www.theverge.com/2023/1/11/23550470/microsoft-employees-unlimited-time-off-2023
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y8A8sp9Ly@JRR5Ih4atF4gAAAJQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8A8sp9Ly@JRR5Ih4atF4gAAAJQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8A8sp9Ly@JRR5Ih4atF4gAAAJQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.johnthecpa.com/blog/finance-and-accounting-benefits-of-unlimited-pto-policies
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8A8sp9Ly@JRR5Ih4atF4gAAAJQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2023/01/11/microsoft_database_connection_fix/
[8] https://www.theregister.com/2023/01/11/teams_premium_more_expensive/
[9] https://www.theregister.com/2023/01/10/microsoft_openai_investment_google/
[10] https://www.theregister.com/2023/01/10/microsoft_acquires_fungible_compsable_dpus/
[11] https://news.ycombinator.com/item?id=34341956
[12] https://www.teamblind.com/post/Microsoft-switching-to-Unlimited-PTOs-juGiPnEi
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8A8sp9Ly@JRR5Ih4atF4gAAAJQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://www.glassdoor.com/research/professionals-cant-fully-unplug-on-vacation/
[15] https://www.zippia.com/advice/unlimited-vacation-policy/#:~:text=In%20fact%2C%20employees%20who%20work,companies%20with%20traditional%20PTO%20policies.
[16] https://whitepapers.theregister.com/
If your manage is terrible, and doesn't value you, then you already have this problem
They could also do this with salary
Just put a pot of dollar bills on the floor on the last Friday of the month, the greedy ones should be fired, uhhhmm.. relocated.
It creates weird incentives. In times when the economy is in decline, people will take little time off out of fear for being relocated (in IBM speak).
When things are booming and the company could use the capacity, people feel more secure, since there are many jobs available, and take off more.
I've worked for employers with both types of leave policies, in multiple countries with very different labor laws and practices, and in my limited experience what matters is the company culture, not the HR policy or the law.
When I was a U.S. Federal employee, annual leave was quantified and very generous. It was also entirely hypothetical because no one was ever allowed to take more than a fraction of accumulated leave. It was made clear that requesting more than a few days at a time, or aspiring to use more than a fraction of your annual leave before it disappeared at the end of the year, was bad form. As I was leaving that position, I was told that (1) no I won't be allowed to take my accumulated leave before it expires, and (2) the effective date of my departure would be right after the use-it-or-lose-it cutoff specifically so they won't have to pay me its cash equivalent. Which tells you a lot about labor relations there and why I left.
My current employer switched from quantified to unlimited leave a couple of years ago. Here, supervisors have always encouraged employees to take leave, and that did not change.
So all this hand wringing over which policy is better seems to me to be misplaced. A good employer will do the right thing, and a bad employer will screw you, whatever the FAM or the HR manual says.
Looks like it goes from 4 weeks PTO to 2. Roughly a 4% pay cut if you then take another 2 weeks UPTO. Lovely.
You had to be an employee for 10 years to get 4 weeks. PTO started at 2 weeks and hit a cap of 5 weeks.
Challenge for corporations: If this is not about reducing the amount of PTO that people take, then include liability terms in the contract: guarantee that workers will receive a minimum PTO for a given year, and provide 1.5x hourly compensation if that isn't met.
Do i understand this right?
If US companies allow a limited paid time off they have to keep money earmarked for paying for that.
If they offer unlimited paid time off it would be impossible to reserve unlimited money to pay for it so they don't have to do that. As it is not clear how much money they'd need anyway they do not need to reserve any money for PTO if they don't set a limit.
So they can get out of the obligation to reserve money for paid time off by just claiming to offer unlimited PTO but at the same time denying any request for PTO when management feels like it?
Christmas picture...
A month ago I went to produce the annual Christmas card and went scrounging for vacation photos. Then I realized we didn't take a vacation in 2022. Sure, a few days off here and there, but no actual week long break.
I've been on the unlimited time off plan for years. At least under the old plan I capped out on accrual and was forced to take a break. Now I just keep grinding away unless I have a reason to take time off. Yeah, I know I could, and yeah, I know it is my fault for not taking advantage of it.
So unlimited time off....that's a company win.
Meanwhile, in HR.... "We believe it is healthy for employees to take a needed break to recharge..."
Subject to a fair use policy, terms and conditions apply. We reserve the right to bury you in work and sack you if you dare to use it. Managers have a right to deny your leave if they just don't like you very much, or if everyone else is off at the same time as you want.
Enjoy!