History and experience point to attendance and time off as being core issues for both employers and employees. For the employee "time off" is viewed as a sacred benefit that has done nothing but gain in importance over the years — so much so that every conceivable survey now shows people choosing time over money when it comes to receiving a reward. Our "hurry up" lives show no signs of slowing down and let's face it: The people who cheat at the time game aren't about to suddenly play fair. So the need for a progressive and flexible time policy that both rewards the good guys and keeps the bad guys in check is a high priority. Do you know what your time options are today or are you stuck in a "that's how we do it here" rut?
Amazing But True!
Time-off work for holidays, sick leave and vacation days are not rights that employees have but voluntary benefits that employers offer. No company is compelled by any law or statute to offer employees any paid days off at all. No paid vacation. No paid sick days. No paid personal days. No paid holidays. This massive benefit easily averages 25 paid days per year or the gifting of one out of every 10 work days. While not required to offer it, most companies do simply as a historic given or a competitive necessity; absorbed and rightly justified as the cost of doing business by investing in the well-being of your employees. Regardless of the size of your company, paid time off is a big cost and it should be monitored. Put another way, for this kind of money, it should work for you and your employees.
Each employee has their own ideal working environment — there is not one setting to satisfy your entire staff. When it comes to attendance and your time-off benefits, it is nearly impossible to make everyone happy. Inflexible policies can become an albatross around your neck. A flexible, responsive attendance plan works best today. Paid Time Off (PTO) Banks can reduce entitlement attitudes about sick days, promote honesty, resolve fairness issues, increase attendance, ease administrative headaches, give you a way out with chronically late or time-needy employees and create an adult environment where "grown ups" manage their own time. The ultimate result can be a vast improvement in morale.
One Size Fits Nobody
One thing's clearer than ever… everything's faster — even vacations. Your employees, just like you, are pulled in a million different directions. The days of packing up the family wagon and heading out for a two-week vacation are long gone. Most dual income families each with their own busy kids just can't relax that way anymore. Long, lavish get-aways have been replaced with day trips and long weekends. As our society continues to diversify — as our families continue to form and reform in ever more creative ways, even the celebration of holidays is different. The one-size-fits-all paid time-off policy just doesn't fit well enough anymore. A PTO Plan acknowledges the environment in which we live and tries to simplify this new and very complex life issue.
What Is A PTO Bank Exactly?
A PTO Bank is a relatively new method of offering and administrating paid time off for both large and small companies. The earliest PTO implementations go back about 10 years. The PTO Bank gives each employee a certain number of paid days to "use as they choose" for vacation, intermittent sick leave and personal time. Reports indicate that the PTO Bank adds up to more productive, responsible and satisfied employees who enjoy the freedom of taking personal time while maintaining their privacy. It has also been referred to as a "no fault" attendance policy since time off is no longer tracked by category (i.e., there are no more sick days). The employer immediately benefits through reduced administration and less verification. A sick day or personal day simply becomes a no fault PTO day — private details and white lies are no longer required. For this to work, management must be prepared to remove itself from the loop when it comes to employees' personal life stories and happenings.
Building A PTO Bank
If you have an employee with 12 months' service and your standard offering is a one-week paid vacation, four sick days and one personal day, your starting PTO Bank offering would be 10 days (plus paid holidays). After surveying businesses in your area, you may want to improve your paid time-off benefit by 20 percent. If so, then employees with 12 months' service would receive 12 days of PTO "banked." It is customary to raise the PTO days as the employee's years of service increase — changing the PTO limits at two years, three years, five years, 10 years and so on. Often PTO Banks top out at 25 to 30 days for a company's very best staffers. This process requires some big picture thinking to get it right!
Where It Gets Tough
Trial and error from early PTO adopters can help you avoid some trouble. Some of the big issues you will need to consider include:
- Offering partial days to prevent losing your "talent" for the entire day
- Insisting on "use it or lose it" policies to prevent large carryover of unused days
- Properly handling any poor planners who overdraw their accounts
- Letting employees "even the playing field" by cashing in unused days
- Coordinating PTO Plan with other time-off considerations (bereavement, disability, etc.)
The "cash in" allowance is vital if your goal is to lower unscheduled absences as some people will always be financially motivated. You'll find much great help with sample PTO policies and real-life case scenarios if you perform a thorough check of the internet.
An Innovative Concept — A Winning Record
When you design your time-off programs you must look to achieve a balance between empowering employees and controlling costs. A well-designed PTO plan is not only innovative, it's inexpensive to implement and it can truly assist an owner in striking that work/life balance. The good news — a majority of employers reports that the PTO Bank has been effective in lowering absenteeism and meeting their objectives. After that first jolt of newness and change wears away, surveys show that employees really respond favorably to the PTO system. As a matter of fact, "fairness" is often the word that employees use when they're asked for the greatest benefit of the plan.