Benefits and Compensation, Recruiting

Unlimited PTO May Help Solve Your Recruitment and Retention Issues

Paid time off (PTO) has become a hot topic in the HR world. Employers across the country are using PTO to attract and retain workers by giving them the flexibility they crave, but could these efforts be falling flat with employees?


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PTO comes in many forms; whether it’s sick leave, vacation time, or even pet bereavement leave, your employees want flexibility to live their lives outside of the workplace, and more employers are beginning to understand this.

Not only is PTO great for employee wellness, but it’s also a fantastic way to attract and retain top talent. However, if you aren’t offering enough PTO to your workforce, you could potentially lose this top talent to competitors that offer more time off.

Common Ways to Allocate PTO

If you’re new to PTO and want to consider providing this benefit to your employees, consider this information from BerniePortal’s latest PTO survey report, “First-Class PTO: Is your PTO policy stuck in coach?” There are two common ways to distribute PTO:

  1. Annual allotment: A specified number of days per year that either expire or rollover based on an annual date. The date could be January 1, or it could be based on employees’ hire dates.
  2. Accrual bank: PTO is accrued based on a predetermined schedule, such as monthly or quarterly, generally up to a “positive limit,” after which no more days are accrued until some are taken. Accrued time may have no fixed rollover or expiration date, or it may be managed through a combination structure whereby days accrue but must be taken before the employee’s hire date or end of the year.

According to the BerniePortal report, annual allotment seems to be the most common (60%) way employers are structuring their PTO policies. On the flip side, 37% of respondents say they choose to use the accrual bank method.

So, where does that leave the other 3%? Those employers have either an unlimited PTO policy or no PTO policy at all. Whichever way you decide to offer PTO, keep in mind the amount of time your competitors are offering so you can adjust your policies to retain talent.

What Types of PTO Should You Offer?

Let’s face it: Pet bereavement leave sounds like one of those trendy perks to lure younger talent in the door, but do you have to break down every single type of PTO option available to employees?

According to BerniePortal’s survey report, a majority (54%) of employers offer umbrella PTO, which means employees are free to use PTO as they see fit instead of taking a day off that aligns with the company’s list of acceptable uses.

According to the report, “The majority of employers surveyed use an umbrella PTO policy, and this number is expected to grow, as this is easier to manage administratively.” Umbrella policies are a great way to make employees happy because they enable employees to take a day off for whatever reason they want without having to worry about being penalized for it. But how much PTO should you offer?

How Much PTO Should You Offer?

Ultimately, there are a lot of factors to consider when determining how much PTO you should offer. But if you want to stand out as an employer of choice, consider the report findings:

  • 7% of respondents offer 1–5 days of PTO,
  • 25% offer 6–10 days,
  • 30% offer 11–15 days,
  • 17% offer 16–20 days,
  • 20% offer over 20 days, and
  • 1% offer unlimited PTO.

BerniePortal’s report states that “more than half of respondents are offering a one-to-three week policy that employees earn annually or accrue throughout the year. If your policy fits this mold, you are probably on par with other employers. However, this means you risk losing employees to organizations with more modernized, flexible, or generous PTO policies.”

Things to Consider When Creating a PTO Policy

If your company hasn’t implemented a PTO policy just yet, here are some things you should take into consideration:

  1. Determine the number of days you’ll allow employees to take off. Whether it’s 1 to 3 weeks, unlimited PTO, or just paid holidays, you must determine how much time off you’re willing to allow employees to take. This decision should be based on your staffing needs. Also, look at the patterns of vacation use from previous years, and compare this time with other companies in your industry. If you want to attract and retain talent by offering PTO, you must know what your competition is offering, as well.
  2. Choose what happens with unused vacation time. At the end of the year, will employees be able to “rollover” their unused time? Or should you implement a “use it or lose it” policy whereby employees must use all their time before a certain time frame? Keep in mind that if you make your policy “use it or lose it,” you may have to scramble to fill staffing voids if employees all take PTO at the same time.
  3. Set a time frame for distributing PTO. Determine when employees will get more time off each year by distributing PTO on employees’ work anniversaries or at the start of the new year. As mentioned above, if you opt to go with a “use it or lose it” policy and everyone’s PTO is dispersed at the start of the new year, you could be in a pickle during the end of the year as employees scramble to use their remaining PTO.
  4. Define how employees will get their PTO approved. One of the challenges with PTO, according to the BerniePortal report, is getting PTO approved. BerniePortal suggests using an online platform or automated technology that will allow employees to request PTO and that will automatically send the request to their managers’ inboxes, allowing for quick and easy approval and fewer headaches for both employees and managers.
  5. Clearly communicate your policy. According to a blog post from Paychex, “From newsletters to staff meetings, rewards statements, and your employee handbook, make sure employees understand how PTO fits in with their overall benefits package and why they should adhere to specific guidelines to make it work for everyone. New PTO policies can also be discussed during employee benefits meetings or with clearly worded information in your employee handbook. Openly address the most common questions employees have, such as the number of PTO hours they’re entitled to, the methods in which PTO is dispersed, time-off request/approval procedures, and what happens to unused time.”

PTO can be a great way to attract and retain talent, so long as your policies are implemented and enforced correctly. Keep the above information in mind when creating a PTO policy for your company.

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