What is one best practice for paid time off policies?
To help you with your company’s paid time off policies, we asked HR managers and CEOs this question for their best insights. From allowing employee input to creating a sustainable plan, there are several recommendations that may help you with your paid time off policies.
Here are eight best practices for paid time off policies:
- Allow Employee Input
- Highlight The Benefits of Utilizing PTO
- Stop Solving For All The “What If’s…”
- Create PTO Categories
- Educate Employees On The Policy
- Offer a Cash-Out Option for Unused PTO
- Set a Limit On Carryover
- Create a Sustainable Plan
Allow Employee Input
The components of a paid time off policy affect the employees of the company the most. Therefore, one way to design a great policy is to transform the policy-making process into a democratic one by inviting employee input. Of course, one of the first things to do is to clarify that although inputs are being invited from everyone, the final policy itself will consider other practical aspects. And although it is challenging to design a policy that makes everyone happy, a democratic feedback process will at least take into account the majority vote and align core policy components accordingly.
Eva Taylor, WP Buffs
Highlight The Benefits of Utilizing PTO
As appealing as paid time off may be to most of your employees, there will always be some that feel reluctant to make the most out of it. A large number of the current workforce feels that taking well-deserved breaks from work may set them back on their progress at work, or find it hard to unplug when the time comes. For such instances, having an awareness program that highlights the many benefits of PTO as well as reassures employees that their learning and development won’t be affected by the break, is a great option.
Riley Beam, Douglas R. Beam, P.A.
Stop Solving For All The “What If’s…”
When creating or revising policy, I always encourage folks to think long and hard about why they are creating or revising a policy. Too often we spend hours, weeks and months trying to craft policy for the outliers, for the people who, no matter what we do, find a way to game the system. This is especially evident with point or occurrence based attendance policies. By engineering policy to address each and every “what-if” scenario, we end up with overly restrictive micro-management and we take away a leader’s ability to make decisions and actually lead. Instead, craft a policy for the 90% of employees who genuinely care, are responsible, respectful, and show up. Coach leaders to actually lead, make decisions and take ownership for the actions and behaviors of their team.
Barbie Winterbottom, the Business of HR
Create PTO Categories
At the very least, I recommend separating sick days from vacation time, and I’ve seen some companies go further by adding “mental health days” or a similar category that employees can use on a limited basis. This avoids having employees come to work sick to avoid “wasting” PTO they need for a vacation or other life commitments. On the flip side of this are employees who don’t take their PTO to relax and rest in case they need it to cover an illness in the future. Having PTO categories allows employees to better manage their time and maintain their work/life balance—they’ll feel freer to use PTO for a true day off when they need it, and will be less likely to come to work sick if they don’t need to sacrifice a vacation day to stay home. Classifying PTO this way is a better option than unlimited PTO policies, as well, which the data shows often leads to employees taking fewer days off overall.
Jon Hill, The Energists
Educate Employees On The Policy
Many employers make the mistake of assuming that employees know what their PTO policy entails. Unfortunately, this is not always the case. It is important to educate employees on the policy, including how much PTO they are entitled to, how it can be used, and any restrictions that may apply. You may also want to communicate any changes to the policy so that employees are always up-to-date. Having a clear and concise PTO policy will help ensure that everyone is on the same page and knows what is expected of them.
Marc De Diego Ferrer, MCA Assessors
Offer a Cash-Out Option for Unused PTO
While there’s no denying that paid time off is definitely something many employees look forward to, you simply cannot force your teams to make use of it. That said, PTO is still an important workplace benefit so instead of scrapping the idea entirely, evaluate if you can offer some other kind of compensation to the employees that may be reluctant about taking the time off. The most popular and widely appreciated alternative is offering a cash-out option so that employees turn in all their unused days off and still feel included and valued.
Demi Yilmaz, Colonist.io
Set a Limit On Carryover
One of the main benefits of PTO is that employees can save it up and use it when they need it. However, if unused PTO accumulates over time, it can lead to resentment from other employees who feel like they are doing more work because others are taking advantage of the policy. A good way to avoid this issue is to set a limit on how much PTO employees can carry over from one year to the next. This will encourage employees to use their PTO as intended and discourage them from saving it all up.
Peter Lucas, Relocate to Andorra
Create a Sustainable Plan
When putting together a paid time off policy, it is necessary to consider how sustainable the entire plan is to the company. While it is a great idea to offer employees impressive PTO benefits, if the company is unable to sustain these benefits in the long-term, it will not only seem like a wasted effort but may even backfire and damage its reputation. Therefore, instead of trying to match the best policies out there, it helps to align a PTO policy that works as much for the company as it does for its employees.
Larissa Pickens, Everfumed
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