Modern PTO Policies that Work
3 steps to implement a successful PTO policy
1. There are three modern paid time off (PTO) strategies worth adopting: Flexible PTO, Unlimited PTO, and Mandatory PTO
2. Use a simple PTO request and approval process such as PTO by Roots
3. Build a company culture that discourages overworking
Companies must be intentional with their PTO policies to address time off concerns and reap the many rewards that PTO brings to workers and businesses.
Providing a generous paid time off allowance in your employee benefits package results in:
- Improved talent acquisition and retention
- Greater job satisfaction
- Boosted creativity and productivity
- Long-term company success
However, many employees are reluctant to take the time off they need and deserve. The following US-based statistics give us an insight into why:
- 35% of US workers believe there is a negative perception associated with taking leave
- 32% fear workplace repercussions if they take leave, such as getting fired or overlooked for a promotion
- 52% have unused PTO at the end of the year
To overcome these challenges, you must implement a progressive PTO policy and be upfront about why time off is important to your business. This post shares how in three steps:
Step 1: Opt for a modern PTO strategy
Modern PTO policies consolidate leave into one PTO bank. Unlike outdated leave systems that allocate specific days for vacation, sick time, holidays, jury duty, and personal days. Modern PTO can be used in any increment and enables employees to manage their time off as they see fit.
This approach benefits employers since they don’t have to worry about PTO accrual, rollover into the next year, PTO payouts when an employee leaves, or unplanned absences due to employees using their sick days for time off.
Whether you’re a large or small business, we recommend one of the following types of PTO policies for your company to offer to both full-time and part-time employees.
Flexible PTO provides employees with a set number of days that don’t need to be accrued each pay period or earned based on an employee’s years of service. The minimum number of days typically depends on local country or state laws. However, companies that provide more generous PTO benefits will attract top talent.
The minimum amount of PTO required by local law in the world’s wealthiest countries (including 16 European countries, Australia, Canada, Japan, and New Zealand) is 20 days. However, most companies provide additional paid days off for national and public holidays.
Unlimited PTO (but set a minimum)
Unlimited PTO allows employees to take off as much time as they want or need as long as they continue to uphold the responsibilities of their role.
During the early days of unlimited PTO, employers found that their workforce took less time off than average due to a lack of clarity and encouragement. You can overcome this by setting a minimum number of days employees must use and centering company culture around trust and accountability.
Unlimited PTO is also an excellent strategy for globally dispersed companies that must comply with labor laws in multiple jurisdictions. Unlimited PTO ensures that companies always exceed the legally required time off minimum no matter where they hire.
Download our Unlimited PTO Policy template for free and customize it to fit your needs.
Mandatory PTO is one of the newest PTO strategies. This strategy emerged in response to research that found employees were overworked yet reluctant to take time off due to work pressures, unclear PTO policies, and stigma.
Simply calling PTO “mandatory” sends the message that employees must use their time off.
Companies can enforce mandatory PTO in a few ways:
- Require each employee to take a certain amount of time off consecutively each calendar year; this could be one week, five days off intermittently, or one day off per month
- Set monthly, quarterly, seasonal, or annual deadlines for employees to use their PTO
- Schedule team or company-wide mandatory time off where a department or the entire company shuts down during quiet periods to enable their workforce to disconnect from work
A study by business management software company Skynova found that more than two-thirds of employees with mandatory PTO rated their at-work happiness as good or excellent. Employees with mandatory vacation days were also 10% more likely to experience good or excellent mental health.
Bonus PTO strategies to bundle into your paid leave policy
Show your workforce that PTO isn’t just for vacation time, personal time, or sick leave. Incorporate alternative types of paid time off into your flexible, unlimited, or mandatory PTO policy.
Consider including the following types of PTO in your policy:
- Floating holidays: Employees can use floating holidays to take time off work for national and religious holidays and cultural events not included on the company calendar. Some organizations offer their employees free reign to choose any day off. Others list pre-approved paid holidays and events to use for floating days. In some instances, businesses have blackout dates that no employee can use (usually during busy times at work)
- Volunteer days: Employees can use these days to offer some help at a local charity or organization
- Mental health days: Employees can use their mental health days to take time off work to focus on relieving stress, relaxing, and preventing burnout
- Learning and development days: Employees can use these days to take a course or training to develop their skills or work on their own creative projects. Companies like Google embrace this idea by encouraging the creative team to spend one day a week working on personal projects
Step 2: Adopt a simple PTO request and approval process
The second step to creating a successful company policy for PTO is to choose a process that makes requesting, approving, managing, and tracking days of PTO straightforward.
Many organizations still require employees to submit time off requests to managers via paper, email, or electronic forms. This approach creates a time-consuming administrative burden and leads to headaches and human errors.
With PTO by Roots, employees can request all types of PTO via the Slack app. Managers can use the same platform to approve and track PTO usage. The plugin integrates with Google Calendar, blocking days off for visibility and automating OOO messages.
In addition, the Roots PTO plugin provides regular vacation reminders and behavioral nudges, prompts employees to re-assign roles and tasks to co-workers, and automatically alerts managers and admins to unhealthy PTO patterns.
Step 3: Orient your company culture to discourage overworking
No PTO policy will ever be successful in a company that actively or unintentionally celebrates or rewards employees who overwork.
Reinforcing overworking can take many forms. Here are a few examples:
- Allowing employees to forfeit their unused vacation for cash
- Praising employees that regularly work late
- Encouraging employees to share the number of hours they’ve worked
If you’re not actively discouraging this behavior, you’re promoting it.
To give your PTO policy the best chance of success, you should:
- Reframe time off as productive: PTO is a necessity, not a perk. Wellness workshops and mental health Slack channels are a great way to inform your team about work-life balance and the benefits of taking time off to rest and recharge. You should also explain the knock-on advantages this has on a company’s success
- Be a PTO role model: Set an example to your team, always use your PTO, discuss your PTO plans, share pictures, and normalize conversations around PTO
- Send out reminders: Automate PTO reminders in Slack to encourage your team to plan and request their PTO in advance
- Give some extra spending money: Evernote gives employees $1,000 to spend on vacation. FullContact offers employees $7,500 to spend on vacation if they promise not to work
- Penalize employees that do not take PTO: It might sound a little harsh, but SimpliFlying, a global aviation strategy firm, deducts PTO pay if employees fail to take PTO or if they contact the office during their time off
Easily manage PTO with Roots
Roots is a powerful HR tool that provides a suite of plugins, including PTO by Roots, making it easy to request, approve, manage and track PTO directly in Slack.
Beyond PTO, Roots has many other tools to help you with HR processes, from onboarding, team connections, 1-on1s, referrals, pulse surveys, and a free org chart.