Paid Time Off or PTO is a vital part of your company’s benefits package. Having a good PTO policy can help you attract and then retain the very best employees.
Incidentally, when composing your PTO policy, it’s important to first gather details about your options. After all, paid time off is an extremely valuable commodity and its importance demands it is evaluated with care. To get you headed in the right direction, consider the following tips on how to craft the right PTO policy for your organization:
How to Craft The Ideal PTO Policy For Your Company
Here are three main aspects to keep in mind when crafting your company’s ideal PTO policy:
Determine Your Company Holidays
Obviously, company holidays would not be considered a PTO day off or vacation day for an employee but instead a paid holiday where your business is closed. As you craft your PTO policy, now is the time to determine what days will qualify as company holidays.
Determine The Appropriate Amount of Days Off
Based on your current staffing needs along with those utilized by other area businesses, consider how many days off per year is appropriate. While it is a decision you must make for the betterment of your employees, the U.S. Bureau of Labor Statistics discovered that in 2017, private industry workers typically received 10 paid vacation days after they were employed for one year. After five years of employment, this typically went up to 15 paid vacation days.
Determine The PTO Approval Process
A good PTO policy will have a well-defined approval process with room for exceptions in the event of an emergency. These steps should be well outlined for employees and should be easy to understand and follow. In other words, keep the approval process as simple and seamless as possible for the benefit of everyone involved.
Types of PTO Policies
The following are the types of PTO policies most often utilized by modern-day businesses :
- Mandatory PTO Requirements and Policies: As the less common type of PTO policy in the group, this is one option that you might not have ever heard of before this list. Similar to the allotment policy (outlined in more detail below), employees are given a specific amount of paid time off each year, and they are encouraged— or in some cases mandated—to take their allotted time off.
- Unlimited PTO Policies: Unlimited PTO policies are relatively new and have been brought onto the scene largely by startups and technology companies who gave them as incentives for recruiting. Although it is technically unlimited, this, of course, can be abused and so there are often some tracking measurements. However, basically, these policies allow employees to take the time they need off when they need it, and they don’t necessarily have to worry about keeping track of those hours.
- Allotment PTO Policies: This type of PTO policy gives employees a limited number of PTO hours each year. In other words, it doesn’t have to be built up, but is often given in a lump, becoming their allotment for the entire year, hence the name. Some businesses allow their employees to carry over their unspent PTO time into the next year. Others do not allow this.
- Accrued PTO Policies: This type of policy, also known as the accrual or traditional policy is the most common type of PTO policy. While the details can differ slightly from company-to-company, the general idea is that your employees can accrue a specific amount of paid time off hours based on certain criteria. Often, it is based on how many hours an employee works, such as an employee accruing two hours paid off for every 40 hours they work.
Getting The Right PTO Policy in Place
Work-life balance is vital to the success of your employees and your organization overall. Consequently, with PTO becoming a more important aspect of any benefits package, it might be time to reevaluate how your company looks at the present and reconsider your current policy. Contact our team to see how we can help you achieve the best plan and strategy for your business.
