The Pros and Cons of Paid Time Off Policy

by | Feb 1, 2018 | Attendance, Human resources policy, Paid time off

PTO policy: thumbs up or thumbs down?

HR solutions to challenging personal problems aren’t always easy, and sometimes there are positives and negatives to weigh when making a decision. One area human resources management finds especially challenging is paid time off.

According to the Bureau of Labor Statistics, the majority of civilian businesses offer their staff some sort of time off or leave that is paid. The most commonly granted forms of paid time off are paid holidays (with 75% offering them), and the least common is paid family leave (13%). Many companies are opting to, instead of sorting out the various times of paid time off, funneling them into one catchall column and simply calling it PTO. PTO obviously offers a benefit to the employee, but what about the company? Here are the pluses and minuses of extending PTO to your staff:

Pros

  • Flexibility: Workers are partial to PTO that gives them the chance to adapt their PTO to their personal needs, whether it be for illness, vacation or what we’ve come to call a “mental health day.”
  • Transparency: Employees don’t get an incentive to lie about being sick to use up their PTO, and that honesty leads to a healthier employee/company relationship.
  • Efficiency: It can be a bear for HR to track all the various types of paid leave, from illness to vacation to personal time—labeling it all PTO streamlines the process.

Cons

  • Higher use: Workers tend to be more likely to use all their PTO, whereas they might not use all their sick or personal days under the previous system.
  • Coming in sick: Staff might feel obligated to come in and work when sick to save up their time off for vacations and other purposes.
  • Liability: States like California, Illinois and Massachusetts mandate that employers pay out all earned PTO upon termination of employment.

Making PTO work for you

If your company decides to implement a PTO program, there are certain steps your human resources managers can take to increase your chances of success and smooth sailing:

  • Ensure your PTO policy aligns with the value your company places on work/life balance
  • Clearly articulate your PTO policy to managers and employees, and apply that policy consistently
  • Encourage employees to use their PTO—they’re likely to return to their desk after their time off reenergized and more productive
  • Prohibit employees from working during PTO off; that work ethic is admirable, but workaholics sneaking in a quick email or project tweak from vacation exposes your firm to liability.

While companies increasingly are gravitating toward PTO—some even offering unlimited PTO—it might not be the best fit for the unique needs and practices of your company. Use your company’s values, business requirements and workplace culture to guide you in creating a PTO policy that best suits your organization and your employees. If you need help navigating this challenging topic, feel free to contact us; we’d love to help you tailor your PTO policy to fit you and your staff.