What Is Flexible Time Off? Definition and How It Works

Flexible time off is a perk that more and more companies are offering their employees. This type of time-off policy is seen often in organizations that do not follow a standard 9 a.m. to 5 p.m. workday and that are considered more progressive than traditional organizations. In this article, we'll explore what flexible time off means, how it works, the benefits and potential drawbacks of flexible time off and a comparison of FTO and paid time off.

What is flexible time off?

Flexible time off (FTO) is a time-off policy that gives employees an unlimited amount of paid time off (PTO) days. In most cases, the hours that employees take off do not have to first be earned or accrued. This is different than more traditional work settings that allot a certain amount of hours of paid time off for each pay period. Employees can use their flexible time off for vacation, sick leave or other reasons that would otherwise cause them to miss time off from work.

Some organizations provide an unlimited amount of FTO while others offer a set amount of days employees can use each month or year as they choose. The most significant aspect of flexible time off is that it is bundled together with both sick leave and vacation time. So, rather than receiving five days of sick leave and 10 days of paid time off per year, an employee would instead receive a total of 20 flexible time off days that they can use as they please.

How does FTO work?

Flexible time off works by offering employees a greater amount of flexibility in regard to their time off from work. This greater level of flexibility allows employees to enjoy their allotted or unlimited time off as needed without the pressure to "use it or lose it" or to feign sick if they feel they need additional time off but aren't actually ill.

In most organizations that implement flexible time off, employees will first have to get approval from their manager or employer for the time they plan to take off. Some organizations may limit how much time can be taken off in a period such as a month. This helps to prevent employees from taking an excessive amount of time off all at once.

Flexible time off also works by allowing for more flexible reasons as to why the time is being taken off. For example, rather than having to go on a vacation or have a family member fall ill to feel able to take time off, employees can enjoy a day or two off for reasons like wellness or mental health days.

This form of time off is available to employees who work remotely as well. While remote employees certainly enjoy a heightened level of flexibility just by being able to work outside the office, they still need and deserve time away from work.

Related: What is Unlimited Paid Time Off (PTO) and How Does it Work?

Benefits of FTO

There are several benefits of implementing a flexible time off policy. The primary benefits of FTO include:

• Greater respect for diversity: Companies who implement an FTO policy demonstrate to their employees that they respect and honor the diversity within the workplace. Different individuals have different needs, whether they be related to health, religion or culture. Employees often have more reasons to take time off than a holiday or an illness, and a flexible time off policy honors these needs and diversity.

• Increased employee commitment: Employees who feel that their employers value their time and energy and are willing to give them time off when needed are more likely to be happy in the workplace and more committed to their job. Flexible time off is a great way to boost employee commitment and ultimately reduce employee turnover rates.

• Ability to adapt to changing employee values: Millennials are a primary component of today's workforce, and this population has different values than the generations before it. Millennials value mobility, flexibility and rest as well as the freedom of choice, and a flexible time off policy honors all of these values.

• Increased employee wellness: Employees who have the opportunity to take time off as needed to accommodate their wellness and health needs are often healthier overall. Even a day or two off here and there can have a significant impact on an employee's performance and morale. Flexible time off can help prevent burnout and in turn increase overall employee wellness in the workplace.

• Improved employee productivity: Employees who are happy in the workplace and have the ability to take time off to take care of themselves when needed are often more productive than those who aren't. Employee burnout is a major phenomenon in today's workplace, and flexible time off helps to reduce the burnout rate within a company and keep employees productive and performing at their best.

Related: How to Ask for a Day Off: Tips, Template and Example

Are there drawbacks to FTO?

The following are a few potential cons to consider when it comes to flexible time off:

• Potential for abuse: When employees are given flexible time off, there is a potential that one or more employees may abuse this policy by taking off excess time or not giving notification before they take time off. One way to combat this is to review the time off each employee takes and ensure it is being used appropriately.

• Overlapping time off: Another potential downside of flexible time off is that employees may choose to take time off at the same time. This is especially concerning if employees work on the same team or department. One way to reduce this risk is to ask employees to inform their managers ahead of time of their anticipated time off so the managers can plan ahead for their absence.

• Unclear expectations: If a flexible time off policy is not properly explained to each employee, it can be easy for employees to misunderstand how the policy works. This can lead to employees taking too much time off or not taking enough time off. It's important to review this policy with employees at the onset of their employment so they have clear expectations of their time off.

Related: How to Improve Employee Productivity

FTO vs. PTO

There are a few key differences between flexible time off and paid time off (PTO). One primary difference is that a traditional paid time off policy requires employees to accrue days throughout the year. For example, employees may receive five PTO hours for every pay period they work. Flexible time off is typically given upfront, so no accrual is necessary.

Another difference is that paid time off that employees have accrued is often paid out if the employee were to leave the company or if they do not use their accrued time during the year. Flexible time off is not typically paid out in the event that an employee leaves or it is unused.

Both forms of time off are different when compared to unlimited paid time off. Unlimited PTO gives employees an unlimited number of days to take off throughout the year as long as their time off does not impact their ability to complete their work. With both FTO and PTO, employees are given a set amount of days to be used as time off.