Thinking of Implementing a PTO System?

PTO trend ‘seems to have leveled out’

Workplace flexibility ranked as the primary motivator cited by employers for implementing a paid time off (PTO) bank leave system for employees, according to a 2014 WorldatWork survey, “Paid Time Off Programs and Practices.” Nearly half (49%) of the respondents who indicated they use a PTO bank system cited granting employees more flexibility as the primary motivator for implementing a PTO bank system.

WorldatWork conducted a survey of its membership to better understand usage by employers of PTO bank systems (typically defined as plans that offer a combined bucket of available days to be used for a variety of types of absences) and traditional leave: for example, vacation time, sick time, and personal days. WorldatWork conducted similar surveys in 2002, 2006, and 2010.

“PTO banks give employees more control over managing their time off and therefore offer more flexibility. Employers tend to see PTO banks as an appealing option for attraction and retention and overall ease of administration,” said Lenny Sanicola, WorldatWork senior practice leader. “However, [2014] data show us that PTO bank style programs, while appropriate for some organizations, are not for everyone. After considerable growth in usage over the past 12 years, the 2014 data show the trend of moving from a traditional leave system to a PTO bank system seems to have leveled out.”

In the 2014 study, 56% of respondents reported offering a traditional leave system, 41% offered a PTO bank type system, and 2% indicated “other” as to what type of leave system they offer.

Other highlights from the 2014 survey:

• The top three primary motivators for implementing a PTO-bank system are “to grant employees more flexibility” (49%), “easier to administer” (20%), and “to stay competitive with other companies” (14%).
• For 2010, the top three primary motivators for implementing a PTO structure were, “easier to administer” (38%), “to stay competitive with other companies” (26%), and “to reduce absenteeism” (21%). This shows that absenteeism is no longer a top reason, dropping from 21% in 2010 to 7% in 2014.
• In 2014, 72% of healthcare and social-assistance companies used a PTO bank type system, which is not surprising since PTO banks primarily originated in the hospital industry and in other organizations that have 24/7 operations.
• Organization sizes between 1,000 and 9,999 employees are more likely to have traditional leave systems versus PTO bank systems. In larger organizations, it is not unusual to find PTO banks because these programs are easier to administer than traditional systems.
• Organizations with PTO banks are more likely to offer paid time off to part-time employees (81%) versus organizations with traditional leave systems (69%).
• In 2010, only 40% of organizations allowed employees to use paid time off as of the date of hire. This number increased to 56% in 2014.