Dan Jimenez

Overhauling your approach to PTO

14 May 2021   |   Culture Productivity

Dan Jimenez
Dan Jimenez

Overhauling your approach to PTO

14 May 2021   |   Culture Productivity

Dan Jimenez, CEO of Chatbooks, took a typical approach to PTO for tech startups: unlimited, untracked.

PTO was one less thing for leaders and managers to worry about, and it was a nice perk to offer when recruiting.

But as the depths COVID-19 set in, Dan was getting stressed. His colleagues told him he needed a break. He felt like he couldn’t take one.

Then he looked around and realized no one was taking one.

From January 2020 until September 2020, nearly no one had taken vacation time in Chatbooks.


PTO is not a monolith

One of the most interesting parts of this conversation was realizing that PTO is not one thing. People were using the daily and weekly flexibility in their schedule to get things done in their life, but no one was taking a week or more to completely recharge.

Dan and the team realized how important it was not only to have the short term flexibility, but also have longer stretches of time where you can completely check out of work and recharge.



Chatbooks then initiated mandatory time off (MTO). For one week every quarter, you must be out of the office. Completely checked out. And they would be tracking it to make sure it happened. In Q1 of 2020, only 25% of employees took any time off. In Q1 2021, that jumped up to 90%.


Working out the wrinkles

Chatbooks had to customize this MTO approach. They started with looking at Q4. Since they are a consumer-focused company, they needed everyone engaged through November and most of December. So, they created a company-wide winter break for the last week of the year.

But Q1 gave some challenges. “So this year, what happened is of that 90% stat that I shared that 90% of people took their MTO, the vast majority of that was the last two weeks of March. That was hard. It was dead. That happened and we took a step back and said, okay, can’t have that happen again, there’s just too many people out. And so it just was ineffective.”


Dan said they are experimenting with seasonal quarters rather than calendar quarters. This means everyone takes off once in Feb-Mar-Apr, once in May-June-July, and once in Aug-Sept-Oct, and then everyone gets the same week in December off.





Dan on Twitter


Welcome back to The Digital Workplace podcast. Today our guest is Dan Jimenez. He is the President and COO of Chatbooks. Hey, Dan. How’s it going today?

It’s going great. Thanks for having me on.


Excellent. Dan Jimenez, I’m excited to talk to you because you’ve got a great topic and a great company to walk us through as we get through this. So we’re talking about paid time off and how that gets reinvented. So that’s going to be great. But first, let’s verify you are a real human right now. Your CAPTCHA question is, would you rather live 100 years in the past or 100 years in the future?

Oh, man, I love this question. This is a good one. I would have to go with 100 years in the future. That would be my choice. I think just my curiosity about what the future holds for society, I think it’s probably what would cause me to choose that and just know what improvements we make. I think, generally, I’m an optimist. And so I like to think that the future is going to be a lot of progress from where we are today. So I’d love to see that.


I hear that. I think I would probably pick the same. Mostly because there’s not a lot about 1921 that just super jazzes me.

Yeah, yeah, exactly. 100 years ago was pretty not too dissimilar to where we are today after Spanish Flu and all of that. So hopefully in the future now we don’t repeat it.


Recovering from the First World War and all that stuff that goes on. But yeah, 100 years in the future, I have enough pessimism in me to be like, maybe it will be horrible. And it could be like the most depressing thing in the world to see. But it could be awesome. And 100 years, in some ways, doesn’t seem that long, but the rate of change is just astronomical too.



Anyway, let’s get into you, in terms of what you’re going to bring to us. Tell us first about Chatbooks. What do you guys do? What’s your company like?

Chatbooks, we are a consumer technology company. We’re based here, just south of Salt Lake City in Utah. We have a mission that’s focused on strengthening families. The way that we do that right now is through creating apps that make it super easy to print the photos on your phone into monthly photo books. We have 180 employees-ish, 180 plus or minus a few. A lot of them are here in Utah, but a lot of them distributed over the geographical US as well. Within the last year, we’ve gone from a very office-centric culture to a remote-first culture. And that has been a big change for us. But that’s who we are.


That’s excellent. And I love that the nature of your company is to take the digital and turn it back into the physical, because especially when it comes to pictures, it’s like something that used to be so tactile, and something that we would hold and look at all the time. And now they’re just all crammed in our phone. And it’s hard to get them out and review them as a family and talk about them.

Yeah, that’s exactly right. We’re all about just getting the memories out of your phone and into your life, into your hands where you can enjoy them and just making it super easy and affordable to do that for everybody and to have that bookshelf backup of your family memories, something that we enjoy working on.


Cool. Let’s get into your company, you said 180 people, specifically today we’re going to be talking about paid time off. There was an idea of what that meant pre-digital days. But I want you to tell us about the experiments that you’ve been running in your company.

Yeah. So we got started back in 2014. Like many other tech startups during this era, we had a time off policy, which was the “unlimited PTO” that you’ve probably heard about or worked at a place that had that. And I think that just comes from just trying to match what you might get at another technology company just to try and match benefits, because unlimited PTO sounds amazing, especially if you come from a place where it was limited and tracked PTO. But I don’t think we put a lot of thought into it either. I think that it was just a blanket, unlimited PTO, untracked, it was just really simple, a low administrative burden for us, you didn’t want to have to put a ton of time into tracking all of that. Then that was what we had for a few years.

And coming into 2020, and then COVID hit, everybody just went home. Everybody’s working from home and everyone’s trying to figure out what the new work culture is like. And that’s when we started to just realize that we were running into this problem where people weren’t taking any extended time off. And I think there was some of that leading up to it as well and the years preceding 2020 where unlimited PTO sounds great, but in practice, is hard to make sure that people are taking sufficient time off. And there’s almost like this culture, this worry of I don’t want to be seen as taking too much time off. Or if there’s just not a norm and expectation set, then we found that there were lots of people just hardly taking any time off. And that just wasn’t good.


Yeah, I think this is a common thing you see a lot, especially in a US work culture, where we’re not used to taking long holidays off anyway. You go to some European countries, and it’s like, okay, it’s standard, we’re going to take a month off, or this person is going to be gone for that time. But here, it’s, like you said, there’s that pressure of, oh, I don’t want to be seen as somebody who takes excessive time off and someone who seems as abusing this system. So then I’m not going to do anything. And then you throw COVID on top of that, and then people are a little bit nervous anyway, maybe about the job, but we’re still going to be here. So I’m going to keep working extra. And then there’s nowhere I can go anyway so I’m just going to keep working. So you’re sensing that’s a problem. But you’re not tracking time off either. So how do you know that it’s a problem?

I started to recognize it in myself first and working with our executive team, them pointing it out to me is like, look, Dan, you’re getting burned out, and you’re getting difficult to work with. You need to take some time off. And I’m like, oh, I can’t take time off, we’ve got this, that, and the other. This is a crazy year. And I just started to realize that I was not fun to work with when I had gotten to this point where I was just getting stretched so thin, and then started to realize, like, man, it’s been a year plus since I’ve taken more than a day or two off. And I think that’s the problem with unlimited PTO, at least in our setting was people felt free to take an afternoon off here or a day off there. But there just wasn’t a long stretch where you can actually disconnect from work. And so if you can’t psychologically disconnect, and I think rest and relax in a meaningful way, then those little one or two day periods here and there don’t really accomplish what you would like for it to accomplish from like a mental health and mental wellness perspective for employees.

And so, I started noticing it in myself first, started looking around and seeing that everybody had gone a long stretch. Now we’re into August or September of 2020. Q1 is really busy so not a lot of people take time off in Q1, and then COVID hit. So now we’re nine months in, and no one really has taken time off throughout the year. And that’s when we sat back as an executive team and just had this conversation, what we were observing on our teams and realizing that what we had in place as unlimited PTO just wasn’t cutting it. It was actually bad for company’s mental wellness, not helpful.


Let me stop you just for a second because something hit me as you were talking about this that’s really important. We tend to lump all PTO as the same. Any time you’re not working, that’s this classification that we have over here. But I love that you’ve separated the idea of just a flexible work week, where I’ve got some doctor’s appointments, or I have to go do something with my kid,s that kind of flexibility within a weekly schedule versus that really you need time off to recharge, and we’re talking days, like a minimum three or four days to actually do that. I think that that itself is a new thought even for me to think about that. So that’s really exciting. So tell us more about what you’ve done.

Yeah, so August, September, last year, we come together, we realize there’s a problem, we tried to think of a solution. And we thought what we would really like, what the norm we would like to maybe set as a precedent is that everyone take at least one week off for five continuous business days off every quarter, every three months. That’s the norm we want to set. Now, how do we communicate this change? One of the terms we came up with, and I had heard it elsewhere before, I can’t remember exactly where. So I’m not saying that we invented it, but we started calling it mandatory time off. So MTO instead of PTO. And mandatory time off is exactly that. It’s like, hey, every quarter, you need to plan as a member of our team one week off, and you need to coordinate with your coach or your manager when that’s going to be taken. And then take it and then HR is going to track to keep tally on what percentage of our employees are actually taking their MTO, not just a day or two here, but what percentage of our team is actually taking that extended time off.

And so we put that into effect in September, so Q4 of last year was the first quarter. As a consumer business, we’re unique in the fact that Q4 is our busiest time of the year and November through December is just crazy up until all the last orders are shipped out and received. And so we had a little bit of a rule there where everybody takes their MTO at the same time, from Christmas until the start in January, there’s a two-week stretch that we call our winter break. And so it’s, hey, during Q4, it’s a blackout period leading up to the Christmas holiday when all the holiday orders have been shipped and delivered. And then we take a two-week break together. But then Q1, Q2, Q3 is up to you to figure out what week you want to take. And this is a minimum, this isn’t a maximum. We still have umbrella unlimited PTO, but mandatory time off is more about setting the expectation of the minimum length, and then cadence or frequency of extended time off to be taken. Because like you said, we do think about it pretty differently than just the flex work schedule that you could have for the shorter cycle things.


Good. So we’re talking in May of 2021 right now. So tell us, Dan Jimenez, how did Q1 go? Did people do it? What was the response from it? You’ve actually gone back to tracking it now that you didn’t track it, now, you’ve added that back in.

Yeah. So in 2020, in Q1 of 2020 as a comparison, the baseline, we had 25% of our employees took any amount of time off in Q1 of 2020. In Q1 of 2021, we had 90% of our employees take their full week MTO. So not perfect, but a lot better, over a three-fold increase in terms of time taken off during the quarter. And it’s just so crazy to think, well, we had an unlimited policy, how could it be only a quarter of employees are even taking time off? But I think if companies who had unlimited policies put in the effort to track it, I think that’s what they would find that it’s actually just a poor program. So yeah, increase from about 25% to 90% in terms of time taken off year over year for Q1. And then we recently did an employee survey just asking how everyone feels supported in their mental wellness at Chatbooks, and 93% of employees at Chatbooks say that they feel that Chatbooks very much supports their mental wellness. And so that, I think, is just an indication of this policy and others that we’re trying to implement to help support their mental wellness. So that’s the change that we’ve seen.


So who is feeling this? Does it feel like a different company now that people are having this thing? Because, I mean, it’s one thing when you’re in the office and you’re used to seeing somebody all the time, and then for a week, they’re not there. Oh, they’re on vacation, they’re doing something. But when you’re fully distributed, sometimes you don’t recognize that, maybe even as a COO, you’re sitting there and you don’t know when everyone’s taking off. There’s so many different teams that are there. You don’t get that feel like, oh, the office seems a little bit emptier today, or anything like that. So what’s that been like?

Yeah, that’s an interesting observation. I actually hadn’t thought about that. But you’re right. I remember, in times when people would take it off, or sometimes it’d be like just the common week that just happens to be good for the calendar for most people, and a lot of people are out of the office for spring break or whatever it may be, and you’re like, oh, man, the office is kind of dead. I don’t know if I’m going to get much accomplished this week, to go into a remote-first culture. I personally don’t notice as much the waves of people coming in or out. I just think there’s planning that goes ahead of time. Coaches, the term we use for our managers, coaches know when their different team members are going to be out and we can just try to manage it.

One thing we did notice is that, for us, and just the way that we operate with that peak during Q4 dynamic, we actually are shifting our schedule now and when we talk about the quarters, because nobody took time off in January, because you just had your winter break. And now it’s like annual planning and just kicking off the big initiatives for the year, that carries into March plus people want to go out when it’s nice weather. So this year, what happened is of that 90% stat that I shared that 90% of people took their MTO, the vast majority of that was the last two weeks of March. That was hard. It was dead. That happened and we took a step back and said, okay, can’t have that happen again, there’s just too many people out. And so it just was ineffective.

And so we said, we should probably line up these periods that we talk about with the seasons that people actually take vacation. So we’re moving it to now that we have a spring season that’s February, March, April, and then a summer season, May, June, July, and a fall season, August, September, October. And then like our Q4 is November, December, January, with the winter break in the middle of it. So that’s just an example of one little tweak that we’ve made to it, to try and just communicate, hey, we don’t want to have everybody out at the same time. And if you feel like, oh, I got to get my mandatory time in, I got to do that before Q1 closes, then everybody leaves in March.


I think that’s really fascinating. And in general when we talk about new practices and experiments that people are running, there tends to be like, okay, these are the frameworks that we found that work well. But when it comes down to individual application, every company is going to be different. And like you said, because you’re a consumer facing company, and especially the nature of what you’re doing, that Q4 is going to be booked solid, even last year, with all the shipping problems that were going on, I’m sure that was a big mess for you guys, and wanting to make sure that everyone was on hand for that. But I love that you’re finding ways to continue to tweak that and continue to try to find the best way to do that. What’s been any kind of not even pushback, but any kind of criticism or things that coaches or managers are pushing back and say, hey, can we solve this problem? What are they telling you?

Yeah, one of the things we got was just, despite us at the very beginning, trying to say, hey, this is a minimum, I think there was still this perception, especially for new employees who weren’t here during the change that might have been hired in the last few months, they come in, and they read it, they think, okay, all I get is four weeks a year, and this is my max. And so that’s my only vacation I get and the only time off that I get. And so we’ve had to continue to clarify that this is just a minimum, this is a norm, just like with any culture, any workplace culture is made up of norms, and the norms are exemplified by the leadership. And people start to pick up on that. And so as much as we try to put it in a company handbook, what you observe others doing is the norm. And so we’re trying to create a norm of a week off every quarter. So I think we’ve had to just clarify. So there was confusion around that.

Having to clarify that there’s no expectation of what you do with your time off. Obviously, you can’t go to Europe right now, you can’t, it’s hard to take these lavish vacations, but we’re not really saying that what’s important is that you take a lavish vacation or go to an exotic place, but rather than you just disconnect, delete Slack from your phone for a week. We don’t want to hear from you. Go off and do whatever it is. So for one of the weeks off that I took, I just did a staycation. This was last fall and just hung out in the mountains and hung out with the kids and just disconnected for a little bit. And so there’s really no expectation from us on what you do, or what you use that time. A lot of employees have used the time to explore Utah’s national parks, which we don’t always take the time to go out and see and do because it’s a bit of a drive or folks who have just stayed at home and taken care of things here at the house or worked on their home office or whatever it may be. So it’s some of the things we’ve heard.


Yeah, I love that. I think as I’m thinking about it, the whole concept of paid time off, it brings in that we had these discussions about productivity and how we need to really divorce productivity from time as much as we can. But it’s not about how much time you put into something, but what’s the outcome you’re able to get away from that. And the whole concept of PTO is that, usually, we own your time. And there’s a little bit of time that we will let you do whatever you want to with. And so there’s like this, again, I’m paying you for your time, or I’m giving you some time, a little bit extra. But really what you’re trying to bring about is, I mean, a new outlook on time, right? That time is still important. But we’re not going to necessarily quantify it and monetize that time. Now, the time off is all about how do you recharge, so you can come back and do good work and bring it back. It’s not necessarily about counting hours and counting days that are there. So it’s this new framework that I feel like even if people try to explain it to their parents, it would be like I don’t understand, and then they start complaining about I only get four weeks off and the parents are like what?

Yeah, I’ve described this one to my dad. It’s just such a foreign concept. It’s to think what would our grandparents say about all that we enjoy in terms of work/life balance and benefits. But one of the points you hit on, I think is important is, one of the primary values of our culture at Chatbooks is a term that we use grown up, it’s just a term that we apply as the number one value of Chatbooks is what we hire and fire for is the grown up value and that we just recognize everyone’s grown ups, not in terms of age, but more just professional maturity. And because you’re grownups, we have that trust as well. And so we’re not going to micromanage your time, we’re not going to micromanage your tasks. You don’t have to tell us, hey, I’m going to be out for 30 minutes here or there. It’s just you have this open, strong relationship with your coach and there’s just a high level of trust that you’ll deliver on your work product.

And so when it comes to time off as well, the only reason that we’re tracking mandatory time off is to ensure that it’s been taken, not that, oh, you’re taking too much. I can only think of one instance in the six years that we’ve been at Chatbooks where we ever had to have a conversation with somebody about taking too much time off. That’s not what we’re worried about. It’s the opposite. I can think of dozens and dozens of examples of people who’ve just gotten burned out and haven’t taken enough time, because we just need everybody to bring their best best self to work. And we think a key part of bringing your best self is being rested and not overdone.


Awesome. Walk me through some of the generational stuff that we just touched on a little bit. Who’s your oldest employee? How old are they?

Oh, that’s a good question. I would say our oldest employees, we’re a pretty young company. I’d say our oldest employees are mid-40s, mid late 40s.


And then what’s the bottom range? Who are the youngers?

Yeah, college interns, so 18 to 22.


So who struggles with this more, the Gen Xers that are wondering about it, or the Millennials who have been in this for a while and are trying to create these rules, or the Gen Z folks that are just coming in? Who do you feel like struggles with these concepts?

Ah, that’s a good question. I think the only struggling I see is just the struggling of still taking the time to plan and take the time off. And I would say that the people that shade on the older half of the average are having a harder time doing that, I think, but it’s hard to know. I haven’t sliced the data by age to see if there’s any type of trend that’s coming out. But I think it is a bit more of a mindset shift for those of us who have spent time in our career working at places that either had strict PTO or hardly any PTO. You’ve been trained throughout your career about how to work that it feels weird when you start breaking that habit or that norm, just being comfortable with the fact of, hey, I’m going to take some more time off than I’m used to.


My gut feel says that a baby boomer would have permanent cognitive dissonance about this idea, like forever. They might learn to live with it, learn to accept it. But it would forever be like, what is going on? I don’t get it. But someone coming in, I feel like some of the Gen Z folks, the newer people that are entering the workforce are maybe also a little bit like they’ve never been trained for this. So there’s maybe a lot of trust. And is this for real or is this not for real? And in general, I don’t know that that age group has, especially growing up in these COVID times is like, do they know how to disconnect and recharge? Or are they this always on generation that’s always plugged into their phone and they keep all the apps up anyway? This is just assumptions for me. I don’t know if you’ve seen anything.

No, those are great questions, more for us to explore to try and see how this program is affecting people of different ages, something exciting to look into.


Yeah, cool. Dan, what’s one thing that you guys at Chatbooks, what’s the next thing you want to try to tackle from a digital workplace angle that you’re going to spend some effort trying to come up with some new ideas and experiments on?

That’s a great question. So like I think I said at the beginning that we transitioned from a very office-centric culture to where we did not allow work from home at all. It was we had an HQ, we had a couple of small satellite offices, but it was every day you were in an office, in the satellite office to help minimize some of the commute, but a couple days a week, you were driving down to headquarters. And so that caused a lot of just commute time for a bunch of our employees. So we went from that to 100% remote because of COVID. And then as we’ve gone through this year, we’ve realized that it’s actually working really well for us. We’re now more of a remote-first culture. We’ve changed offices from a big, giant 20,000, or it was 30,000 square foot office. We’ve cut that down in half to a different place that’s more in the middle. And we’re calling it our clubhouse. We feel like the role that the office has, its primary function going forward is more of a social gathering space than it is for a place for everybody to come and work out of every day.

And so we’re just trying to work through I think the challenges of being remote-first, but still wanting to entice people to come in, but not having the real strong, like you must come in on such and such day and you must be present at this meeting. We just don’t believe that that’s necessary anymore. That’s what we’ve learned to get by and actually thrive in this setup, that the clubhouse is just this concept of, hey, we’re going to be gathering together for fun interaction brainstorming. But if you don’t want to make the drive or if you don’t feel comfortable being in that physical space with everybody else, it’s not necessary. So this is the next thing that we’re trying to work through. Here in Utah, COVID restrictions are getting lifted a little bit and we’re probably around the corner from reopening the office and letting people come back in as they come and go as they please. And so that’s the thing we’re trying to work on next to figure out.


Yeah, that’s such an important and difficult thing to do is to go from a physical office headquarters to no physical office headquarters. And then try to bring back a physical location as like a feature, an add on and divorce it still from its HQ pool, but still say we still want to have the advantages of physical spaces, but not feel like people have to be there in order to be part of the team. That’s great. Everyone’s struggling with that right now. So I’m glad you’re open about that. And we look forward to having you back again when you’ve solved that mystery for us.

Right, yeah. I’ll let you know when we’ve solved the big Rubik’s Cube everyone’s trying to figure out.


Cool. Dan, where can people go if they want to learn more about Chatbooks and the stuff you put out?

Yeah, chatbooks.com, the Chatbooks app, you can get that on iOS and Android as the best place to check us out. And I’m happy to connect with anyone who has questions on Twitter. My Twitter handle is @thedanjimenez. And so you can connect with me on Twitter if you want to chat through anything if anyone has any additional questions about how we’re doing this. And yeah, that’s us.


Fantastic. Thanks for being on the show. We look forward to hearing from you again.

Okay. Thanks, Neil.

Dan Jimenez is the President & COO of Chatbooks, a consumer tech company focused on strengthening families. Chatbooks makes it super easy to print the photos on your phone into beautiful monthly photo books. Since joining Chatbooks in 2015, Dan has helped the business scale revenue 50x while growing the team to over 180 and fulfilling orders to 45 countries worldwide. Prior to his current role as President, Dan led the raise of $25M+ of venture financing as Chatbooks’ CFO. Previously, he was an associate at Peterson Partners, a Utah-based Private Equity & Venture Capital fund, as well as a strategy consultant at Accenture based in the Bay Area. Prior to earning an MBA at the BYU Marriott School, Dan was a vehicle dynamics engineer at Ford Racing where he contributed to 33 race wins, including the 2012 Daytona 500.

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