Organizational Wellness

What is Flexible Time Off, And How Does It Work?

Mar 1, 2023
Last Updated Jun 11, 2024

Hats, gloves, socks, dresses — how often have you ordered something labeled “one size fits all,” only to have to return it because it doesn’t, in fact, fit all? 

Much like clothing, a one-size time off policy isn’t always a perfect fit. Your employees might be able to stretch or squeeze to make it work for them, but that’s not necessarily the ideal situation. A flexible time off policy, by contrast, is more like offering tailoring services for a suit – there’s a basic model, but it can be adjusted to better fit individual needs. 

Here’s what you should know about a flexible time off policy to evaluate whether or not it’s a good fit for your company.


What is Flexible Time Off? How Does Flexible Time Off Work?

Flexible time off (FTO) is when a company allows employees to take days off without a predetermined allocation for how or when they can be used.

The simplest way to implement a flexible PTO policy is to offer employees a combined time off package. For example, a traditional PTO policy may offer 10 vacation days, five national holidays, and five sick days. A FTO policy would give employees 20 days of leave to take as and when they need to. 

This approach is more common than you think. In 2021, 66% of full-time employeeshad access to a fixed amount of sick leave per year, but nearly a third of full-time employees had access to sick leave as part of a combined, flexible PTO policy.

And that’s not the only version of flex time off. These can work in various ways, depending on the needs and goals of each company. 

If you want to implement a more layered policy, some employers provide their team members with a number of “floating” holidays that they can take on days of their choosing. This lets employees take off days that matter to them rather than being limited by cultural norms within the business. Companies can also let employees exchange part of their salary for extra days off, or allow them to take a day off for family or personal emergencies.

Some companies take flexible time off a step further and offer unlimited PTO, which is a flex time off policy where all days off are paid and there is no limit to how many can be taken. But you don’t need to offer employees uncapped paid leave to give them more flexibility over the type of leave they can take.

Benefits of a Flexible Vacation Policy

Reduced Stress

A flexible policy means employees can make their time off work best for them. One employee, for example, may want time off for religious holidays while another may want to align their PTO during school holidays to make childcare easier. Allowing for customized time off can help to reduce the stress of meeting expectations both in and out of work, reducing employee burnout and improving your team’s overall wellbeing.

Streamlined Management

Flexible vacation time makes it easier to keep track of the total number of days off employees have taken. For business owners, managers, and human resources teams, this means less admin work. 

Instead of meticulously tracking the number of vacation days, sick days, and other leave separately, you only have to monitor a single “bucket” of paid time off. Each time employees take a day, or half a day, you just subtract that from their running total.

Boosted Satisfaction

Flexible time off shows trust in employees and can reduce their stress by providing options outside of what’s traditionally considered “acceptable” time off.

This support matters to workers: As revealed in Wellhub's Work-Life Wellness report, 85% of employees say they’d be more likely to stay in their current job if their employer better prioritized their wellbeing. So flexible time off can be a valuable retention tool, helping your employees be happier and healthier at work.

Drawbacks of a Flexible Leave Policy

Moving from a fixed time off policy to a flexible leave approach may require a shift in mindsets and processes within your workplace. The best way to handle these is to plan ahead, plotting out how to best avoid these potential pitfalls from arising in the first place. 


Flexible time off policies can cause confusion for employees (and employers) who are used to a more rigid PTO policy. If employees don’t understand the new policy, it can lead to people taking too little time off.

People may, for example, be reluctant to take time off because they feel like they haven’t earned it, or they’re not sure if they can take it for their specific reason. This under-use of vacation time can negatively impact people’s physical and mental health, leading to increased stress levels or employee burnout.

Finding ways to emphasize taking time off can avoid such unnecessary stress. This can take the form of sharing employee vacation stories at a company-wide meeting, or automated emails to employees when they go a certain number of work weeks without taking a day off. Making time off visible, and treating it in a positive light, can help your employees feel comfortable using their days.

Scheduling Conflicts Within Teams

A flexible PTO policy may mean people are more likely to take time off at the same time—like school holidays or around Thanksgiving. This can make it difficult for managers to balance PTO requests, or leave the company understaffed.

Consider train managers on when and why to approve time off requests, and how to keep enough team capacity each month. Having an open PTO policy that everyone can access may help this process. It can provide guidelines on how much advance notice is required for time off, and how managers will prioritize leave requests if they have multiple people wanting time off at the same time.

Flexible Time Off is One of Many Ways to Support Employees

An attractive PTO policy is just one part of your benefits program. After salary and healthcare, paid time off is one of the most valuable benefits to employees, so flexible time off can be a valuable addition to your company culture. In turn, it may help you to attract and retain top-quality team members. 

Another key way to support your employees and draw in new talent is helping them stay healthy. This can be done with additional flex benefitslike gym memberships and access to virtual therapy. Interested in finding out how you can enhance your benefits program and increase employee work-life wellness? Talk to a Wellbeing Specialisttoday!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!




Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


Our weekly newsletter is your source of education and inspiration to help you create a corporate wellness program that actually matters.

By subscribing you agree Wellhub may use the information to contact you regarding relevant products and services. Questions? See our Privacy Policy.