Most employees want paid time off (PTO). In fact, offering it could give your business a competitive edge and help improve workforce well-being. But before you roll out a new benefit — or revamp an existing approach — ensure you implement a PTO policy that’s right for your people.
Even though 82% of workers earn PTO, according to the U.S. Bureau of Labor Statistics, no universal policy exists. Your personnel and business needs will influence how employees accrue and use PTO.
Luckily, you don’t have to guess, experiment and hope a program eventually sticks. Our checklist will help you develop and implement a PTO policy that’s right for your organization.
Which cultural and financial factors affect a PTO policy?
If your organization touts work-life balance and flexible schedules, requiring PTO use could benefit you. It could be an annual or even quarterly requirement — you could even limit rollover with a “use it or lose it” policy.
On the other hand, companies that don’t need to prioritize PTO may build PTO accruals and usage requirements around:
- tenure
- performance
- organizational hierarchy
- or something else entirely
In some cases, you may find an unlimited PTO policy — one without a set limit — would work best for your workforce. It also never hurts to survey employees to identify what they expect.
How do compliance and operations influence a PTO policy?
The ideal PTO policy should balance being fair and equitable with ensuring business continuity. For instance, if you implement performance-based PTO accruals, ensure every employee still receives the minimum amount of vacation time based on your state or local PTO laws.
You also should verify if your employee head count will trigger a similar PTO requirement. The right HR compliance software can help you account for relevant laws and understand when emerging legislation could affect your business.
At the same time, make sure your PTO policy has safeguards to account for peak periods. For example, you may need to implement a blackout or “first come, first served” requirement if you anticipate a wave of time-off requests during a busy holiday season.
Likewise, invest in a tool that automates time-off decision-making so your supervisors don’t have to meticulously manage every request themselves. This also could help you normalize a PTO appeal process and encourage leaders to have more productive conversations around time off.