Creating Time-Off Policies that Meet Your Business Needs

by | Oct 28, 2014

Creating Time-Off Policies that Meet Your Business Needs

Last month, Virgin Airlines announced that they’ve jumped on the unlimited paid time off (“PTO”) bandwagon. And there’s no doubt that the decision has other companies re-evaluating their policies, too. However, while that reflection comes from a good place, companies may be asking the wrong question. Instead of “Should we offer our employees unlimited PTO?” the question should be “What’s the best PTO policy for our business?”

PTO Policies and Employee Engagement

To date, much of the conversation around unlimited PTO policies has been narrowly focused on two outcomes. Those in favor often argue that that unstructured time-off policies make companies more appealing to top talent, improving recruitment efforts, and producing a higher performance team. Those against point to studies that show employees with uncapped PTO will take less vacation time than those with clear limits. Both of these arguments have some merit. However, if the argument that employees will take less time off holds true, then employers implementing this policy would miss one of the most tangible benefits of offering time off: engagement. Employees who are refreshed return to work more focused and engaged, resulting in greater productivity. And that’s something that doesn’t just affect the employee returning from vacation; that spirit of engagement spills over to other workers, as well.

Structuring PTO Policies around Productivity

This idea of instituting vacation policies that generate greater productivity was apparent in the results from our recent Trend Survey. When asked, “What would prompt your organization to change the time-off package?” 53 percent of respondents said they would change their PTO policies if they could prove that it would improve productivity. Fewer respondents said that they would revise their policies if they improved retention (40 percent), reduced absenteeism (36 percent), or attracted better candidates (32 percent).

Time-Off Plan Infographic

Time-off Plan Infographic

Creating PTO Policies That Meet Your Needs

The following questions can help you uncover the best time-off policies for your organization:

  1. What’s our objective in offering PTO? There are lots of good reasons to offer employees time off, from fostering greater work-life balance as a company to making sure employees have enough downtime to do their job safely when they return. Whatever the purpose is, it’s easier to create policies that support your business goals when you start with clear objectives.
  1. Are we adequately tracking employee PTO? Once you see time off as part of a larger business objective, you’ll need to have an efficient and reliable way to track time off usage. Even in the case of unlimited time off programs, your business needs to understand how time off is used in order to understand whether the policy is effectively supporting your goals.
  1. Are our employee self-service options adequate? If you want to be seen as a progressive employer, your employee tools have to keep up with your policies. Make sure your employees have simple and convenient mechanisms for keeping track of how much time off they’ve earned, for requesting time off, and for checking the status of those requests. EmpCenter, our cloud-based workforce management system, allows employees to access their time-off banks from any web-enabled device, so they know how much time they have available and can easily request time off when needed.

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