What is flexible time off (FTO), and should you offer it?

The average workplace has come a long way from rigid 9-to-5 schedules and vacation tracking spreadsheets.  

In today's fast-paced, remote-friendly, wellness-aware world, employees want more freedom—and employers are learning that a little flexibility can go a long way. One of the latest trends in time off management? Flexible time off (FTO). But what exactly is it, and should your company jump on board?  

What is flexible time off? 

Flexible time off (FTO) is a paid leave policy that allows employees to take time off as needed—without accruing vacation days. Unlike traditional leave systems that track hours or days earned, FTO gives team members the autonomy to take time off without worrying about how many days they've banked. Of course, approval is still required—but the emphasis is on trust rather than tallying. 

FTO is gaining traction as companies seek innovative ways to boost employee satisfaction and promote well-being. It fits naturally into broader trends like hybrid and remote work, flexible scheduling, and a focus on mental health. When people have the freedom to step away and recharge when they need to, they tend to show up more energized, more committed, and, well, more human. In this way, flexible leave policies aren't just perks—they're a smart investment in long-term productivity and talent retention. 

How does flexible time off work? 

While sometimes used interchangeably, FTO and unlimited PTO aren't quite the same. Unlimited PTO often implies employees can take as much time off as they want, with little structure. FTO, on the other hand, doesn't track accruals yet still requires managerial approval and thoughtful planning. 

It's a trust-based model rooted in performance rather than hours. Employees are encouraged to manage their responsibilities and take time off in a way that doesn't disrupt team or business goals. Ultimately, FTO works best in organizations that prioritize outcomes over hours spent at a desk. 

Pros and cons of flexible time off (FTO) 

Like any policy, flexible PTO comes with its upsides—and a few caveats. Let's break them down. 

Pros:

1. Attracting and retaining talent 

Offering flexible time off is a powerful draw for today's top candidates. In a competitive job market, FTO signals that your company values work-life balance and trusts its team—a major selling point for Millennial and Gen Z professionals. 

2. Encourages trust and autonomy 

FTO policies reflect a culture of mutual respect. When employees are trusted to manage their own time off, they feel empowered and respected, which boosts morale and loyalty. 

3. Aligns with outcome-driven performance culture 

In performance-based work environments, it's results—not hours worked—that matter most. FTO supports this philosophy by focusing less on tracking time and more on what's getting done. 

Cons and considerations:

1. Potential for burnout if employees don't actually take time off:

One irony of FTO is that without clear guidelines or encouragement, some employees may hesitate to take leave at all. This can lead to overwork, fatigue, and ultimately—burnout. 

2. Equity issues arise because not all roles can take advantage of each other equally:

Flexible time off might sound great on paper, but if frontline staff or shift workers can't realistically use it the same way office-based staff can, resentment may brew. It's essential to ensure policies are fair and inclusive across all roles. 

3. More prone to abuse:

While FTO is built on trust, some employees may take advantage of the lack of accrual tracking. Without careful management and clear expectations, FTO can lead to scheduling headaches or imbalances in team workloads. 

4. Compliance and legal considerations (in Canada and the US): 

Labour laws in Canada and the US require certain paid leave entitlements, and FTO doesn't override those. Employers must ensure they're still meeting statutory requirements—even with a flexible policy in place. 

Is FTO right for your company? 

Deciding whether to offer FTO isn't just about hopping on the latest HR trend—it's about determining whether it's the right fit for your business culture, structure, and goals. Start by assessing your company's size, industry, and team dynamics. Is your organization built on trust and accountability? Do you already evaluate performance based on outcomes rather than hours worked? 

FTO might be a great fit if you have a results-oriented culture, offer remote or hybrid work options, and want to empower your team. On the flip side, if your business relies on hourly labor, has rigid staffing needs, or lacks a strong feedback culture, it might not be the best option—at least not yet. It's also worth considering whether your managers are trained to support employees in taking adequate time off without bias. 

How to implement flexible time off (FTO) in your organization 

If you're ready to explore FTO, here are a few key steps to help you make it a smooth transition: 

Assessing organizational readiness 

Evaluate your current leave management systems, team culture, and managerial capacity. Are your processes flexible enough to support an FTO policy? Do your leaders trust their teams and lead by example when it comes to taking time off?

Creating and communicating a clear leave policy 

Even though FTO offers flexibility, your policy should be anything but vague. Define how and when employees should request time off, any blackout periods, expectations around coverage, and how performance will be evaluated.

Use a leave management solution. 

Without accrual tracking, a robust time off management system is more important than ever. The right digital solution helps track requests, ensure coverage, and analyze trends to ensure FTO is being used fairly and effectively. 

Have a feedback loop and review process for the policy. 

Your FTO policy shouldn't be "set it and forget it." Collect feedback from employees and managers regularly, and adjust your approach as needed. Check in on usage data to identify patterns—like whether certain teams aren't taking enough leave. 

How PurelyHR can help 

Whether you're managing traditional paid time off or transitioning to a flexible leave policy, PurelyHR's Time-Off module makes the process seamless. Our leave management system allows you to customize policies, streamline approvals, and monitor trends—without drowning in spreadsheets or paperwork. 

With PurelyHR, you can: 

• Offer flexible time off without losing visibility or control 
• Set clear approval workflows and company-wide rules 
• Access detailed reports to track usage and identify red flags 

Whether you're tracking accruals or giving employees the freedom to choose when to unplug, PurelyHR ensures your time off policy supports—rather than stalls—your business. 

Flexible time off is more than just a trendy perk—it's a meaningful step toward building a healthier, more resilient workplace. By empowering employees to take time when they need it (without all the red tape), companies can foster stronger cultures of trust and performance. 

That said, FTO isn't one-size-fits-all. With the right planning, communication, and tools, however, it can be a total game-changer. 

Ready to make time off easier—for everyone? PurelyHR helps small and mid-sized businesses simplify leave management while keeping compliance in check. Start your free 21-day trial or book a demo today.