As a benefits leader or HR professional, you’ve likely seen firsthand how employee expectations around time off have shifted. It’s no longer just about accruing vacation days — it’s about having the space to recharge, handle life events and feel genuinely supported by an employer. Here’s what matters to workers in 2025 and how you can design paid time off (PTO) packages that resonate.
The demand for more and better PTO
Employees in both traditional and unlimited plans are seeking meaningful downtime. Research shows that employees with unlimited PTO take an average of 16 days off per year, while those under capped systems average around 14 days.
Alarmingly, 62% of Americans report not using all their PTO, leaving days unused and stress unaddressed. You’ll want to structure your plans to encourage balanced usage so employees don’t hoard leave or skip needed breaks.
Rigid caps vs. real flexibility
Unlimited PTO may sound appealing, but only 7% of U.S. employers provide unlimited PTO. Despite its appeal, uptake has not surged, and usage patterns remain similar to capped plans due partly to unspoken cultural norms around vacation use.
Recommended For You
Interest in unlimited PTO remains strong, however. On Glassdoor, employee reviews mentioning “unlimited” policies have jumped by 75% compared to pre-pandemic levels, reflecting a growing appetite for more flexible time-off arrangements.
Structuring PTO that works
To meet employee expectations, your PTO plan must be generous but structured. Employees appreciate certainty. Rollover options, payouts for unused days and a clear accrual schedule can enhance trust and usage. Those offering unlimited plans must reinforce them with supportive policy frameworks.
Consider organization-wide breaks like seasonal shutdowns, which allow everyone to unplug without the stress of individual scheduling. Such collective pauses can be a powerful culture-building tactic, reducing burnout and leveling expectations across the board.
Expanding beyond vacation
Your PTO program should reflect the complexity of real life, not just the need for a vacation. While traditional leave structures tend to silo time off into separate categories like vacation, personal and sick days, modern expectations are pushing for more holistic approaches. Employees want to feel supported through every stage of life, not just during annual breaks or short getaways.
That means rethinking what your PTO policy includes. Today’s workforce is increasingly vocal about needing time for caregiving, mental health and significant life events. Whether bonding with a new child, attending to an aging parent or taking a mental reset during a stressful time, your team wants to know they won’t be penalized or forced to use vacation time when life happens.
Offering broader leave categories like paid parental leave, caregiver leave, bereavement days or menstrual leave helps employees feel seen and valued beyond their job description. These types of policies signal that your organization understands people are more than just their output. You’re telling your team that you trust them to balance their personal and professional responsibilities and that you’re ready to support them in doing so.
Flexibility within these categories is also key. Employees appreciate when leave policies are designed with inclusivity in mind, like allowing chosen family to count in caregiver leave or recognizing diverse bereavement needs. Adding mental health days as a specific category can also destigmatize mental health and encourage proactive self-care.
PTO as a retention tool
When it comes to keeping high-performing employees, PTO can be a more powerful retention tool than many employers realize. Workers who don’t feel they have the space to rest and reset are more likely to explore other opportunities. The cost of losing them isn’t just about disruption — it affects your bottom line.
Replacing just one employee can run you close to $5,000 when you factor in recruiting, hiring and training someone new. Multiply that across multiple departures, and it’s easy to see how voluntary turnover drives losses that total over $1 trillion annually. Overlooking PTO's role in employee retention isn’t just a cultural risk — it’s a financial one.
It’s why many employers are rethinking their entire approach to benefits. In a tight and unpredictable economy, boosting compensation isn’t the only lever being pulled. While 51% of employers plan to raise starting salaries, nearly as many are expanding their benefits and perks to stay competitive, and that includes a closer look at PTO.
When employees have access to time away from work, they’re more likely to stay. Data shows that access to PTO significantly reduces the risk of employees quitting by as much as 35%, especially among men. It’s a clear signal that time off is a driver of workforce stability.
Interestingly, while PTO helps reduce turnover, it doesn’t necessarily increase job satisfaction. That’s because satisfaction and retention, while related, are shaped by different factors. For example, flexible scheduling also lowers turnover but works independently of PTO rather than enhancing its effect. The bottom line? Time off and flexibility each offer unique value, and layering both into your benefits strategy can help you build a more loyal, grounded team.
Build PTO packages that reflect today’s work and lives
Your PTO policy can signal that you respect employees' work and lives. By combining generous leave, clear structure, inclusive categories and a culture that normalizes rest, you’ll position PTO as a strategic asset. When you prioritize purpose and clarity in your time-off offerings, you demonstrate that your people are valued and that their well‑being fuels your organization’s success.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
