6 ways PTO banks can help your company
"I'm taking a sick day!" This familiar refrain is usually uttered with just cause, but not always. What if there were no sick days? No, we're not suggesting employees be forced to work when they're under the weather. Rather, many businesses are adopting a different paradigm when it comes to paid time off (PTO).
Under the "PTO bank" concept, employers merge most (or all) of the traditional components of excused absences (vacation time, sick time, personal days, and so on) into one simple employee-managed account, typically offering not quite as many PTO days as under a traditional PTO system. One benefit of this approach is that employers are no longer put in a position to have to judge whether leave is appropriately used. PTO banks may not work for every business, but more and more companies are finding them beneficial.
6 primary motivations
There are a number of reasons that employers are offering PTO banks. Specifically, according to a survey by the HR professional society, WorldatWork, here are the six primary motivations:
- Greater flexibility for employees. Like their employers, many employees appreciate not having to worry about distinguishing vacation time from sick time.
- Ease of administration. Employers don't have to deal with the complications of separating the various PTO components, which makes HR and payroll staffs jobs easier.
- Increased cost effectiveness. More efficient administration often reduces the cost and time of resources spent dealing with employee absences and lost productivity.
- The ability to stay competitive with other companies. Many employees and job candidates view PTO banks as a more contemporary and appealing approach to excused absences.
- Reduced absenteeism. Interestingly, some employers have seen employees miss fewer work days once PTO banks have been established - possibly due to a greater sense of control employees have over their own time.
- Improved employee morale. Simplifying the PTO process and gaining greater command over their time off is typically viewed as a positive, empowering policy by employees.
Making the decision
Although the potential benefits are very enticing, as we indicated earlier PTO banks may not be right for every employer. For example, you may not want to disrupt your current system if it's working well. If you need help analyzing the costs and benefits of changing your PTO system, give our business advisory team a call.