5 Popular PTO Trends

PTO, or paid time off, is any time during regularly scheduled work hours that an employee is permitted not to work yet still receives pay. Essentially, it is time you pay your employees not to work. While it may seem odd phrased that way, PTO is a valuable benefit for both employees and companies alike. PTO affords employees the time to walk away from their work to rest and de-stress and then return to work feeling more energized and productive. This productivity boost benefits everyone.

Your company may classify PTO in different ways. For example, vacation, sick time, jury duty, holidays, or maternity leave can be examples of PTO. Some organizations have one bucket of PTO time allowed, while others break down the number of allotted days or hours per category.

Whichever way you categorize it, PTO is an important benefit to employees. In fact, according to Zippia Research, 63% of employees said they would reject a job offer if it didn’t include sufficient PTO. It’s crucial to offer a competitive PTO program to attract and retain talent in the tight labor market.

First, what does competitive mean?

According to the Bureau of Labor Statistics (BLS), U.S.-based businesses offer an average of 10 PTO days (excluding sick days and paid holidays) after one year of service. This BLS research does acknowledge several factors that affect these averages, including company size, years of service, industry, and geographical location. For example, companies with 99 or fewer employees tend to offer a maximum of 15 PTO days, while larger firms provide a maximum of 19. While considering your idea of a competitive PTO schedule, you should consider these factors.

Now, here are some PTO trends we see in the development of PTO programs:

Unlimited PTO

According to MetLife’s Employee Benefits Trends study, 72% of employees want unlimited PTO. Just like it sounds, unlimited PTO programs offer as much paid time off as an employee needs for any reason. Typically, all PTO categories are in one unlimited bucket in this instance. There is usually a clause stating the employee needs manager approval to minimize disruption to productivity. That way, an entire team isn’t out on PTO all at once. Or, if an employee is experiencing performance issues, there is a way to manage how much time they can take off.

More companies are establishing unlimited PTO policies because of the need to attract and retain talent. There is also a benefit to the company when offering an unlimited PTO policy. Under a standard, accrual-based PTO system, employers must pay out any unused vacation days earned when an employee leaves the company. An unlimited PTO policy removes that obligation.

Ring-fenced PTO

Another increasingly popular PTO program is a ring-fenced approach. This involves policies that allow employees to use different paid and unpaid leave benefits in conjunction with one another.

For example, companies can create a policy that supplements federal or state-mandated sick or paid family leave to create a more robust PTO program. Or, an organization may opt to make up the difference in pay not covered by short-term disability leave, which typically pays out 60%. This way, an employee can have fully paid time off for things like maternity leave.

Mental health breaks

Employee mental health and psychological wellbeing are current hot topics. With the pandemic highlighting the heavy toll burnout and stress can take, employers are investing in mental health resources for employees such as Employee Assistance Programs or paid time off for mental health days.

By adding mental health breaks and encouraging employees to use them, you demonstrate empathy for employees. You may choose to make mental health breaks part of a flexible or unlimited PTO program or a separate program altogether. Acknowledging the need for mental health breaks also adds to the efforts of eliminating the stigma of mental health issues. Sometimes, a day or two of rest and relaxation are enough to re-establish a productive mindset. And, of course, productive employees benefit your organization.

Parental leave programs

Some companies are creating more robust PTO for new mothers and fathers. This allows both parents to settle into a new routine while enjoying their first weeks with a new child without worrying about missing pay or losing a job. In the United States, 76% of fathers return to work in less than a week after welcoming a new child. Many cite fear of risking a career setback as the main reason while others simply are not offered the opportunity.

The competitive labor market means assessing all benefits, including your PTO program. There is no “one-size-fits-all” approach to paid leave. You must understand the needs of your desired employee base and use your benefits, including PTO program, to attract and retain them.


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