Modern PTO Policies that Work

It’s 2020 and the reality in America is that employees aren’t taking nearly as much paid time off as employees in other countries. This is due to a combination of the amount of PTO time that is offered by employers, company culture, and incentives to take the time off. Outdated PTO strategies create a discouraging environment for employees to take time off which usually leads to forfeited PTO.  

What Doesn’t Work?

Keeping Employees in the Dark About PTO

Every employer should include a section about time off and the benefits of it in their onboarding process with new hires. According to a Pew Research study 1 in 5 people don’t know if their employer offers paid leave. And while a majority of few likely have that box checked, over two thirds of employees say they hear mixed messages or nothing from their manager about whether or not it's appropriate to take time off at their company. Following through to ensure your message is permeating down through every level of employment is just as important as setting up the right policy.

Giving Kudos To Workaholics That Don’t Take PTO

There are actually still PTO policies in this day and age that award attendance over employee wellbeing. For example, some companies still use a points system where employees who are absent receive points that lead to consequences. Others policies reward employees that come to work and “tough out” their sicknesses. Others reward employees that put in 80 hours of work per week and forfeit the majority of their PTO days. And you might think, "That's ridiculous, who even does that?" Well you might be doing exactly that on a much subtler level. How have you communicated what a successful employee looks like within your company? Who gets promoted on a yearly basis and who doesn't? Do you emphasize time off taken and time off hygeine at annual and quarterly performance reviews? Not paying attention to the details could be creating a negative culture around overworking.

What Works?

There are a number of companies you can look to who've done PTO "right" - but our favorite company is GitLab, who has over 1,200+ employees in over 65+ countries, and manages to make their unlimited PTO policy work for every employee by implementing detailed processes in their handbook and a supportive culture built from the top down. Below are some other things we've seen implemented successfully at various companies:

Make Your PTO Process Simple

Make sure that employees are comfortable requesting PTO. Make the process as simple and seamless as possible. If your policy allows you to take the process of requesting and managing time off outside of your HRIS and payroll system, we'd recommend doing so. Leverage the systems your employees love and use on a daily basis - calendars, Slack, Microsoft Teams, etc. - in order to keep them engaged and get them in the habit of managing or observing company absences more frequently.

Encourage Time Off

Praise those who take PTO by having a “vacation photo” wall in the office where employees can place their vacation photos. Offer work incentives where employees can compete for vacation centered incentives like flights, and resort stays.

Volunteer PTO Days

Offer paid time off to employees who want to use the day to do volunteer work. It’s a program that’s not only giving back to the community, but it’s a great work break option for your employee, and it is also a really good look for your company’s PR.

Offer Unlimited/Flexible PTO

At first glance, employers might turn their nose up to unlimited PTO or sick time. Many dismiss the idea because the assumption is that employees won't take enough time off or will take too much. But hiring the top talent for your company means hiring managers of one. There has to be a level of trust that employees will get their tasks done and know best what they need to take care of their wellbeing. So long as you are providing a culture that supports employees on both ends of the spectrum of time off taken equally and adequately communicates your expectations as a company, you can be successful will an unlimited PTO policy.

Pay for Their Vacation

If employees aren’t taking PTO, why not pay them to take it? In addition to offering unlimited PTO, Evernote, for example, gives employees $1,000 to spend on vacation, and FullContact gives employees $7,500 that they can use on vacation as long as they promise not to work. This benefit attracts some of the best talent to these positions and puts employee wellness first.

Have a Floating Holiday

Rather than only having a set of 10 paid holidays per calendar year, opt to offer a couple of floating holidays that will allow employees to take the holiday when they want to. Remember when considering this option, to make sure that the policy guarantees the holiday so employees don’t feel like they need to negotiate.

Set Aside Time for "Employee Development"

PTO doesn’t always mean vacation, it could be a time for employees to develop their skills and work on their own creative projects. Think about including an employee development program that allows employees to take PTO time to develop their skills. Companies like Google embrace this idea by encouraging the creative staff to spend one day a week, to work on personal project.

Take a good look at what’s working and what’s not working when it comes to your PTO policies. Outdated PTO policies can discourage employees from taking time off and can lead to a lack in mental wellness, creativity, and productivity. Rather, take a look at forward thinking companies and opt for strategies that are promoting growth, wellness, and productivity.

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