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Spring is in the air, and employees are beginning to plan their summer vacations.
We all need a break from the daily routine, and time away from work is a great way to recharge, refresh, and refocus on goals.
Many organizations provide some paid time off benefits for their employees.
Getting paid for not working is a great benefit.
Just ask anyone who works in the trades, like a carpenter, cement finisher, bricklayer, etc., who only get paid when they work!
Paid time off benefits can be packaged in any number of ways.
The traditional benefits model is that employees are allowed a couple of weeks of vacation and a few sick days per year.
There are different models of these benefits – which can be all over the map.
I’ve seen vacation benefits as conservative as one week a year and as generous as twelve weeks per year (after decades of employment).
Some organizations offer no sick time, and others allow the employee to accrue hundreds of hours for years of employment to help cover the employee in the case of an extended illness.
Here is my case study that will discuss the advantages and disadvantages of paid time off.
I took a job with an organization with a traditional vacation and sick time pay model.
This organization allowed employees one week of vacation after one year of employment.
But they also allowed employees one sick day a month – equating to twelve days of sick pay per year.
That is more than two weeks of sick time – every year!
I wasn’t with the organization very long before I noticed that employees were calling in sick alarmingly.
I had come from an organization with a non-traditional paid time off (PTO) program that was a very different model, and employees rarely called in sick.
I learned that the organization was incenting employees to call in sick. Understandably, who can wait a whole year for a week off?
This made no sense to me, so I began transitioning the organization from a traditional model of vacation and sick days to a paid time off model, which combines holiday, vacation, and sick hours into one bank of hours. This is referred to as a PTO bank.
Within a year of implementing the new model, employee absenteeism and sick call-ins were reduced by 75%!
So, what are the advantages and disadvantages
of having a paid time off benefit?
Advantages of Paid Time Off
Demonstrates That the Organization Values Its Employees
Employees feel valued when allowed time off with pay – which contributes to employee engagement and retention.
Flexibility With Time Away from Work
Employees can use their bank of hours whenever they like (with manager approval) and for whatever reason they choose.
Employees who can take time away from work are more productive because they can manage the competing responsibilities of home and work.
Time Away from Work Refreshes Employees
Employees with paid time off benefits can get refreshed by leaving the work environment and focusing on something unwork related.
Flexible paid time off programs allow employees to choose when to take time off. This allows employees to attend child school events, meet aging parent needs, or pursue a passionate hobby.
Fewer Unplanned Absences
When employees have flexibility with time off, they are less likely to call in unexpectedly, allowing for more consistent coverage of responsibilities.
Paid time off benefits is part of a total compensation strategy and can be used to attract “difficult to recruit” employees.
Employees Are Empowered
Paid time off benefits empower employees to make decisions about personal needs. This choice makes employees feel like they are in control of their lives.
There Are Also Some Disadvantages to Consider
When an employee is not in the office, someone may need to cover their responsibilities. This can be challenging, particularly for smaller organizations with fewer people to draw from.
Paid time off programs are an expensive employment benefit that adds to total compensation costs.
Employees Need to Budget Hours
Paid time off benefits must be managed, and employees must learn to budget their hours to maintain a bank of hours when needed. I’ve seen people use PTO hours as soon as they accrue time, only to be without banked hours when a personal emergency arises.
The specific model of a paid time off program can vary greatly.
The number of hours allotted, the way hours are accrued (annually or per pay period), capping hours, or giving employees the option to sell hours back are also common options.
Tips To Making PTO Successful
Employees need to understand what is and isn’t an appropriate use of PTO hours. Create a policy that helps employees understand how hours are accrued and the process for requesting time away from work.
Create a process where employees request time off and are granted permission to take PTO hours. This step allows leadership time to fill those critical frontline positions.
Communication is the key to all things HR. Take the time to communicate PTO Policy and Process so that employees understand. Incorporate this communication into the new employee orientation process and help employees understand whom to contact with questions about their accrued time.
A paid time off model aims to reward employees by offering the flexibility to be paid for days they do not come to work.
When you think about it, that is a pretty awesome benefit!
Click here for an example PTO Request form.
How does your organization manage paid time away from work?