By Akshay Sachdeva
May. 17, 2022
Do you need to know why your employees are taking time off, or are you fine with them having autonomy over it?
Evaluating which leave policy suits your business requires careful consideration. Scheduling managers need to weigh the pros and cons of each type of leave policy, consider the nature of the business, take employee preferences into account, and pay attention to current trends. Only then can they make a decision on a leave policy that boosts employee productivity and optimizes payroll costs.
PTO is standardized leave that covers all types of paid time off (sick leave, personal time, etc.) with no labels. Vacation time is leave specifically for vacation purposes. So, vacation is a type of PTO, but PTO may not necessarily be for a vacation.
Employers can find ways to retain employees by offering more flexibility around their leave. With PTO, employees don’t need to explain how they’re using their time off. Along with vacation days, employers may decide to offer other types of leave, which means employees have to take different types of leave for certain purposes, which can be restrictive.
The trend is definitely moving toward PTO banks. 63% of employees said they’d turn down a job offer if it didn’t include PTO. So it’s clear that a majority of employees would rather work for a company where they’re free to take personal days without having to state the reason why. Pandemic stress resulting in job reshuffling has only served to further highlight the importance of effective company policies for paid time off, as the workforce is prioritizing mental health now more than ever.
Kerry Wekelo, managing director of HR at Actualize Consulting in Reston, Virginia, switched to the banked PTO policy. She says, “We made the switch because our people were not using their sick time and were complaining about not having enough time off. So we combined to a total of four weeks’ paid time off versus two weeks’ vacation and two weeks’ sick time. Our people love this, and, even as we hire new recruits, they rave about starting at a firm with four weeks’ vacation.”
HR managers must consider the pros and cons of a paid time off policy to determine whether or not their business should offer one. Each type of policy involves costs and benefits to the business and its employees, and a thorough analysis can be insightful in determining which one is right for your company. Here are some pros and cons of a PTO policy:
If you pick the right leave policy, your employees will be happy and productive, and your company will optimize its resources. That’s why, for creating an effective leave policy, you need to take the following steps:
Another option is to switch to an ‘unlimited PTO’ policy. The unlimited PTO plan gives employees the freedom to take off as much time as they need, as long as it’s approved by their managers. But critics say that with unlimited PTO, employees actually take less time off since they rely on company culture to determine the right amount of time to take away. So clearly, there’s no one-size-fits-all leave policy, and you must decide the best policy based on your unique situation.
No matter the type of leave policy you choose, it needs to be easy to utilize. Luckily, tracking things like PTO, vacation, and sick time, and accurately recording all of it on schedules and timesheets, is becoming easier thanks to recent advances in workforce management. Learn more about it by contacting us today – we’ll help make leave management a breeze for you and your staff.
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