Reshaping Employee Compensation with Flexible Benefits 

For decades, paid time off has been treated as a static benefit, either used or lost, tracked in spreadsheets, and often misunderstood by the people it’s meant to support. But in today’s workforce, where flexibility, inclusion, and personalized benefits are top priorities, HR leaders are beginning to ask a critical question: What if unused PTO could become something more?

As companies search for new ways to attract and retain top talent, convertible benefits are gaining traction. Employees can redirect these benefits to support their real-life needs—from student loans to retirement savings—without waiting for a year-end payout or forfeiting what they’ve earned. 

We dive into this topic this week on America Back to Work with Rob Whalen, CEO of PTO Exchange, a platform that transforms unused PTO into flexible financial assets, enabling a more inclusive, engaging approach to total rewards.

Debunking the Myths Around PTO

Rob’s journey to launching PTO Exchange began not in a boardroom, but at his own kitchen table over dinner and wine with fellow entrepreneurs. As he and a colleague reflected on their exit from Cisco Systems, they realized just how much unused PTO had quietly accumulated on their behalf and then disappeared from their lives without being fully leveraged. 

One of Whalen’s core missions is to educate both employers and employees about the real structure of PTO. 

“There’s a fundamental misunderstanding,” he says. “Employees don’t realize that their employer financially accounts for their unused time. It accrues, it has value, and it’s expensed.”

He points out that the myth is rooted in financial illiteracy, not malice. Most employees don’t see unused PTO as lost compensation, and many organizations struggle to help their teams understand the full picture.  

Flexible Benefits: Meeting Employees Where They Are

At the heart of PTO Exchange is a broader concept: convertible benefits. As Whalen explains, these are benefits that can be reallocated by the employee to better meet their personal needs. Whether it’s contributing unused PTO to student loans, covering healthcare costs, or even donating to a charity, the power lies in personalization.

“When people can self-direct benefit dollars, they feel included,” Whalen said. “They feel recognized for who they are and where they are in life.” 

This approach has real business implications, too. Organizations using convertible benefits often see lower turnover and improved morale. They also save money over time by avoiding the cost inflation that comes with PTO rollovers, where time earned at a lower salary is later paid out at a higher rate.

The Truth About Unlimited PTO

While many companies tout unlimited PTO as a progressive perk, Whalen is not convinced. 

“It sounds great on paper,” he said, “but it introduces managerial bias and inequity.” 

Without formal accrual or tracking, the system often favors employees with less responsibility or more assertive personalities. 

“You think you have unlimited time, but you may end up taking less than you would with a traditional policy.”

He goes on to argue that unlimited PTO was born from a loophole in California labor law, a workaround that, in his view, creates more confusion than clarity. Instead of flexibility, employees often get ambiguity. 

“It’s not a real benefit. There’s no accrued value, and that’s what makes it deceptive,” Whalen said.

Money, Motivation, and the Talent War

Whalen believes money still matters for today’s labor market, but not in the way people think. 

“I compete with Microsoft and Amazon for talent,” he said, referring to his 22-person company based in Seattle. 

“I can’t match them on salary, but I can offer purpose and benefits that meet employees where they are.”

He believes the magic formula is a three-legged stool: fair pay, meaningful work, and flexible and responsive benefits. 

“When people feel seen and valued, they stay. They engage more fully when their benefits support their real lives, not just the company’s spreadsheet.”

Expensing People 

Perhaps the most compelling insight Whalen shared was philosophical in nature. 

“The most intimate thing a company can do is expense you,” he said. “When they accrue your PTO and put it on the balance sheet, they’re saying, ‘You matter.’”

Conversely, when a company opts for unlimited time off and eliminates accrual, it may unintentionally send the opposite message. 

“If you’re not on the books, you’re not valued,” he warned. That’s why Whalen targets companies that understand this nuance, ones committed to supporting people as whole individuals.

Rethinking PTO to Rethink Retention

Rob Whalen and PTO Exchange are reshaping how companies think about one of their oldest benefits: providing options. In an age of mobile, multi-generational, and mission-driven talent, providing options could be the next frontier in total rewards.

“We don’t have to create more benefits,” Whalen says. “We just have to make better use of the ones we already offer.”