PTO Is in ‘A Complicated Place.’ What Should HR Do?

Many workers are reluctant to use their paid time off as financial pressures, layoff fears, and AI concerns put a damper on vacation plans. 

It’s a trifecta of problems that’s taking a bite out of one of employees’ favorite on-the-job perks. (According to the 2026 SHRM Employee Benefits Survey, leave is tied with retirement savings as the second most important benefit.) And it’s an issue that employers will want to address.

“PTO is in a complicated place right now,” said Donna Dorsey, CHRO of Chicago-based benefits platform Alight. “Employees know they need time away to recharge, but many still feel anxiety about stepping away from work. Financial stress, concerns about job security, and broader uncertainty around how work is changing can make people feel like they need to prove their commitment through constant availability.”

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A slew of recent figures spells out the issues surrounding PTO anxiety: 52% of U.S. workers said the rising cost of living is causing them to stay home this summer, according to job site Monster. Telecommunications firm NumberBarn finds more than 1 in 4 employed Americans worry taking vacation could make them appear more replaceable because AI can continue performing work while they’re away. And 59% of employees feel anxious about leaving because of work piling up, missing opportunities, and seeming as though they are less committed to their work than those still in the office, according to LiveCareer data.

A survey last fall of more than 3,000 U.S. workers from FlexJobs that 23% of employees didn’t take a single vacation day in the past year.

“Increased financial pressures around economic uncertainty and inflationary pressures are likely forcing people to make some decisions around whether or not a vacation is an option for them or not,” said Toni Frana, career expert for LiveCareer, a career platform, in Niceville, Fla. “Uncertainty in job security and stability can definitely impact the decision to skip PTO as well. Many may opt to save the money they’d normally use for a vacation as a way to pad their finances in the event of a change in employment status.”

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Employees being resistant to taking time off can have a negative impact on both employees and employers. It can lead to burnout, which can result in lower engagement, reduced productivity, and higher turnover rates.

“Mental health and well-being are key elements of job satisfaction and productivity, with PTO being a major component of employee support,” Matthew Owenby, chief strategy officer and head of human resources at Aflac, told SHRM last year. “Job candidates take mental health coverage — as well as PTO — into consideration when looking at future job opportunities. These areas are becoming essential for retaining and attracting talent. PTO should no longer be viewed as just a job perk, but as a vital part of a company’s commitment to employee well-being.”

Leaders Set the Tone

If employees are not taking PTO as much as they have previously, “That is a cultural signal employers should pay attention to,” Dorsey said. 

“If employees feel guilty or fearful about using time they have earned, it may suggest that rest is quietly discouraged, even if the policy says otherwise,” she said.

And if leaders are not using PTO, Frana said, that is a sign for employees that they shouldn’t use it, either.

Leaders set the tone through what they say, what they reward and what they model, Dorsey added. “A healthy PTO culture makes it clear that dedication is not measured by always being available,” she said. “Sustainable performance requires recovery, and employees should not have to choose between protecting their wellbeing and protecting their reputation at work.”

What Employers Can Do

Because now is a particularly stressful time for employees inside and outside of work, employers should put more weight on encouraging employees to take their earned PTO, experts say. 

“Encouraging time away is not just a well-being message; it is a business sustainability issue,” Dorsey said. “People do their best work when they have the space to recover, reset and return with energy.”

HR can help by making PTO easier “to take in practice, not just in policy,” she said. That means helping managers plan for time off early, build clear coverage plans, encourage realistic handoffs, and set expectations around disconnecting. “Taking a week off should not feel like punishment before someone leaves or cleanup duty when they return. When teams know how work will be handled in advance, employees can truly unplug and the business can keep moving,” Dorsey said.

Frana agreed, saying that clear guidelines around the use of PTO, particularly what coverage will look like when someone is going to be out of the office, is important. “It helps employees feel secure about using the PTO benefits the company provides. When there is clarity on this, employees will feel more comfortable taking some time away from the office, especially if work won’t pile up for them when they are out or put an unnecessary burden on the team members who are in the office while they are away.”

Managers also play an important role in removing guilt from the conversation, so HR and company leaders need to make sure managers are adequately trained and communicate with their reports on the value of taking PTO.

“Even small signals, such as hesitation, delay or too many follow-up questions, can make employees feel like taking PTO creates a burden,” Dorsey said. “HR leaders can coach managers to respond with support, plan coverage thoughtfully, and model healthy boundaries themselves. The strongest message leaders can send is that rest is not just allowed; it's necessary.”