PTO approach increasingly popular among employersNews added by Benefits Pro on March 3, 2014

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Joined: September 07, 2011

My Company

By Dan Cook

Bosses want choices, and workers want choices. Often, they don’t want the same ones. But in the case of paid time off, the two parties may find common ground.

Querying companies about their time-off policies, WorldatWork, an association of HR professionals, found that policies emphasizing PTO rather than more traditional vacation/sick day models increased by 43 percent between 2002 and 2010. During that time, traditional time-off plans decreased by 24 percent.

Not only did PTOs grow in favor during that time, but those who offer them tended to enrich them by adding such allowances as bereavement time off and time off for jury duty. Three out of four included the latter by 2010.

Why the shift?

WorldatWork outlined these benefits in PTO vs. traditional models that are likely factors:
  • PTOs tend to reduce unscheduled absences, and the costs and productivity losses associated with them.

  • PTOs tend to make an employer more attractive to current and potential employees, especially those who value discretionary time off.

  • PTOS tend to reduce administrative/compliance costs, as PTO use no longer requires validation in most instances.

  • PTOs let employees decide how to use their time off.
The WorldatWork study reported that a quarter of employers surveyed said they offer consolidated-leave packages that include PTO.

The PTO model appears to be less generous in total days off than traditional models. Respondents indicated that they tend to increase employee PTO every two to five years based upon seniority. Most employers who use the PTO model tend to offer one to two days less time off over time compared to traditional plans, the survey found.

PTOs aren’t all a bed of roses, the study concluded. Workers tend to come to work when they’re sick because they don’t want to use their PTO for illness. Further, the study opined, “Among employees receptive to PTO, such plans can pose problems for employers because employees have more control over when they take time off. Some employees take advantage of their new-found freedom and are gone more frequently than they would be if they had specific days off for certain purposes.”

But other research indicates a PTO plan may actually reduce the overall time employees are away from the job. An Oxford Economics study found employees tend to leave a fair amount of PTO unused at year-end, often because they either feel they have too much work to use it all or their bosses discourage using all their PTO.

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