Hello, and welcome back to Inc.'s 1 Smart Business Story. A growing workplace trend called "PTO hacking" lets employees with just two standard weeks off strategically stretch that time into a staggering 42 days away from the office. With employee burnout costing businesses nearly $48 billion annually in lost productivity, HR experts say companies should not only allow it, but actively encourage it. But without the right guardrails, this clever scheduling strategy can quietly breed resentment, reward bad performers, and leave entire teams uncovered at critical moments. A longtime HR leader who's managed people at Match, Condé Nast, and Indeed outlines exactly where companies go wrong and lays out  the five rules that make the difference.

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BY KAYLA WEBSTER, STAFF EDITOR

A longtime HR pro shares best practices for ensuring employees get the rest they need.

When employees are given a set amount of vacation days at work, some of them try to make it last longer by strategically pairing it with long weekends and other company holidays—a practice called PTO hacking. Human resources professionals encourage it, but guardrails need to be in place to ensure PTO hacking is used fairly and doesn’t disrupt productivity.

PTO hacking can greatly extend your time off. Someone with the standard two weeks off can unlock 42 days out-of-office by strategically scheduling around holidays, according to the PTO planning tool Holiday Optimizer. And with the Occupational Safety and Health Administration reporting employee stress is at all-time highs, workers want to make their vacation time last as long as possible. And that’s beneficial for their companies, too—a Gallup study shows burnout costs companies $47.6 billion annually in lost productivity.

Paul E. Wolfe, an HR professional of 30 years and advisory board member of ADP Ventures, the venture capital arm of the human resources platform ADP, says companies should embrace this practice if they’re not offering unlimited PTO.

“PTO hacks aren’t a bad thing. They’re people trying to make the most of a limited benefit and avoid burnout,” Wolfe says.

Wolfe has held HR leadership roles at large companies like Match, Conde Nast, and Indeed—here are five of his PTO hacking best practices to ensure your company’s workloads stay covered, and culture stays healthy:

As Wolfe noted before, PTO hacking is simply “making the most of a limited benefit.” Give employees the flexibility to do that as long as it doesn’t impact productivity, he says.

“It’s smart to plan around holidays—just make sure we can still hit our deliverables,” Wolfe says.

Wolfe notes that some employees are better at planning ahead than others and may scoop up holidays before their colleagues. This may cause resentment if one employee routinely gets the same extended holiday. To ensure there’s no animosity on teams, rotate the holidays between employees out of fairness.

In cases where employees on the same team are requesting additional PTO on holiday weekends, it would be wise to consider performance while deciding who gets the time off, Wolfe said. If a low performer, for example, already took time off and is requesting additional PTO two weeks later, you should give the time to the higher performer, Wolfe said.

“You can use first come first served, but you should track who got prime days in prior years and spread the benefit around,” he says.

There will also be times when work projects conflict with these PTO requests, and it’s important to ensure business needs come first. But address the problem respectfully by suggesting different dates.

“We have a critical launch that week. Let’s find alternate dates you can take off,” Wolfe says.

Wolfe recommends that companies review PTO quarterly to ensure employees don’t suffer from burnout. Companies should train managers to “proactively ask about PTO plans” and use scheduling technology to keep track of everyone’s PTO to ensure ample coverage.

“This way, people feel free to optimize their time off, but nobody is surprised when half the team is gone,” Wolfe says.

Wolfe notes it can be especially hard for ambitious startups to implement healthy PTO practices, but it’s in their best interest as a business to build that type of culture. When employees do take time off, encourage them to unplug from work entirely.

“You may not be able to afford a month off or long closures yet—but you can define a clear philosophy, such as: “We expect rest; we don’t glorify burnout.”