November 28, 2022
Unlike robots, humans can’t work around the clock 365 days a year. We need time to rest and recharge. Research shows that paid time off (PTO) can improve morale, creativity, and productivity. Talk about a win-win outcome for your company!
PTO policies come in all shapes and sizes – there is no one-size-fits-all approach. The more tailored your PTO program is to your employees’ needs, the better. Plus, that shows your employees that you value their time off the clock.
Let’s dive into the different types of PTO policies, why you should implement one, and five creative approaches you’ll want to consider when implementing, or revamping, your PTO program.
What Is a Paid Time Off (PTO) Policy?
A paid time off (PTO) policy lays out the number of days your employees will have off annually. It will also cover how employees can accrue their time off and the protocols necessary for approval. Finally, it will outline what your employee can use their PTO days for.
Here are some of the most common categories included in a PTO policy:
- Sick days
- Family bereavement
- Maternity or paternity leave
- Jury duty
- Mental health days
- Personal leave
- Volunteer work
- Annual leave
- Parental leave
- Sabbatical/career breaks
Different Types of PTO Policies
There are three main types of PTO policies: traditional, flexible, and unlimited.
1. The Old-School Traditional PTO Policy
At its core, a traditional PTO policy will designate X number of days (or hours) to your employee for a combination of the above categories. For instance, a new employee might be given 15 annual sick days, ten vacation days, and seven days for a family bereavement.
- Provides valuable insights and metrics for how often employees are taking off and for what reason
- Generally, employees who have been at the company longest receive the most PTO, which can decrease employee turnover
- Unappealing to employees and job applicants who don’t want their personal time micromanaged into separate categories
- It creates extra work for employees and admin, since they must keep track of the number of days employees are taking off and designate which category applies
- Employees may not feel trusted to spend their time off as they wish
2. Unlimited PTO
With an unlimited PTO policy, you’ll trust your employees to take as much time off as they need, when they need it, and for whatever reason. The one caveat is that taking time off can’t disrupt their ability to perform their job.
- Strengthens trust between the employee and employer
- Can help you attract and retain top talent
- Saves admin time and resources from tracking PTO
- If an employee is sick, they can stay home without using up their PTO
- Fails to reward your loyal, tenured employees by increasing PTO over time like in the traditional model
3. Flexible PTO
If you want to move beyond the traditional PTO program yet are not ready to offer unlimited PTO, then a flexible PTO policy may be the middle ground you’d prefer.
Under a flexible PTO model, your employees typically have a set number of days they can take off, regardless of the reason. For example, instead of allocating 20 days for vacation and ten days for sick leave, you’d simply offer them 30 days of flexible PTO.
They usually don’t have to accrue those days, either.
- Gives employees flexibility and freedom to use their PTO however they want
- Employees feel you value their time, which can improve their morale and productivity
- Employees may sometimes attempt to avoid taking sick time (even when sick) in order to save more time for vacation days
Why Should You Offer A PTO Policy?
While there is no federal law mandating you to provide PTO to your employees, there are plenty of reasons why you may want to. Let’s cover the benefits of a PTO policy for all parties involved.
- Can improve morale
- Strengthen creativity
- Increase productivity
- Can help achieve a better work-life balance
- Reinforces the company’s commitment to diversity and the individual needs of each employee
- Stronger employee retention
- Less employee turnover
- Competitive edge when attracting job seekers
- Decreased number of unscheduled absences
- Provides the opportunity to get creative with PTO and use it to build soft skills, such as leadership, team building, confidence, and more
5 Creative Ways To Customize Your PTO Policy
You’ll want to tailor your PTO policy to fit the needs of your employees. After all, everyone has a different background, non-work-related commitments, and needs. Some employees may have children, while others have religious obligations or other variables.
There’s far more to creating an effective PTO program than just deciding how many days off each employee receives. Let’s look at five creative ways to customize your PTO policy to give you the cutting edge in retaining and recruiting top talent.
Offer Forced PTO Opportunities
Even when your employees take their PTO, you may discover they’re still answering emails, sending out bids, responding on Slack, or doing any other tasks they would normally be doing on the clock. Working while off defeats the purpose of time off – to rest and recharge.
You can provide forced PTO opportunities that will make them unplug and take a necessary break. Here’s what we recommend:
- Offer an annual vacation allowance, stipulating that the money must be used for a vacation.
- Include a wellness allowance or reimbursement option for a specific number of personal health or wellness treatments.
- Incentivize them to take PTO by offering an annual gym membership if they use all their days off by a particular date.
Incorporate Team Building Activities into your PTO Program
Sometimes just time away from the nine-to-five routine can refresh your employees. We recommend encouraging them to pursue out-of-work activities that can help them build soft skills, such as confidence, collaboration, effective communication, loyalty, leadership, teamwork, and more.
Think of this as redefining PTO to also include paid team time away (PTTA). Here’s how it might work. Let’s say you’ve noticed a severe lack of communication and collaboration in one of your departments. Giving those employees PTTA to participate in an event like Star Games–an Intergalactic Training Camp will help them work on these issues while they have fun at the same time.
Celebrate Diversity With Floating Holidays
Most companies close down during major federal holidays – Christmas, New Year’s, Veteran’s Day, and the Fourth of July. But not everyone celebrates Christmas. You likely have numerous employees who celebrate other religious holidays, but they have to use their PTO to do it.
You can create a fair PTO playing field for all of your employees by offering floating holidays. A floating holiday means they can switch out their time off for Christmas to celebrate Diwali instead, for example. You’ll show your employees that you value and celebrate their diversity, creating a more inclusive workplace.
Allow PTO [or PTTA] for Individual or Company-Wide Volunteering Opportunities
When employees aren’t working, they likely spend time in their respective communities. Many of them probably have causes to which they devote time. Consider allowing their PTO [or PTTA] to include individual or team-wide volunteering outside work.
Build-a-Birthday is a collective opportunity for your employees to give back to the homeless children in their community. They will work alongside your local social services department or homeless shelter to create a meaningful birthday experience for the kids. This is an impactful way to give back to the community, and allows your employees to collaborate, work on their communication skills, and garner their empathy at the same time.
If you have ever had a pet, you know they are a part of the family. Many of your employees have at least one pet at home. We all know those employees whose pets have names, backstories, wardrobes (complete with bow ties and hats), and more. Of course, they bring joy to your employees outside of work.
A pet’s death can feel like a significant loss. And if you’ve ever experienced it, you’re likely all too familiar with that grief. Acknowledging pet bereavement in your PTO policy shows that you recognize the reality of your employees’ lives outside of work. Coping with grief after such a loss can negatively impact their work, but it doesn’t have to. Redefine your PTO to include their furry family members, too.
Ready to Offer Collaborative Opportunities in your PTO Policy?
You don’t want your employees to burn out from a lack of rest or work-life balance. And you don’t want them needing a vacation when they return from their vacation PTO because they failed to unplug from work while they were away.
Getting creative with your PTO policy will help employees reap the benefits of time away. It’ll give your company an edge over the competition by retaining them and recruiting new talent in the future.
You’re free to define personal time off however you wish (barring any state laws that might apply, of course). That could mean time off for your employee to choose how and when they want to spend it or including designated PTO to commit to volunteering or teamwork.
Regardless of how you define it, you’ll want to tailor your PTO policy to reflect your company’s diverse and talented employees. Demonstrating that you acknowledge the importance of your employees’ lives off the clock speaks volumes about what your company values. Your team will know that they are more than just employees to you – they are human beings who deserve rest and balance.