How to Approach and Manage Paid Time Off

As the weather warms up and we head toward summer, there’s something on the mind of most employees: vacation. With dreams of vacation comes the reality of a workplace paid-time-off policy.Screen Shot 2016-04-04 at 10.44.22 AM

Vacation and paid time off shouldn’t have negative connotations around your office place. In fact, handling employee leave and paid time off the right way can make your workplace, your talent, and your productivity levels stronger.

Recent research shows that of American workers who have some paid time off at their job, over 40 percent didn’t take advantage of all the allotted time. 34 percent of employees surveyed as part of the “Assessment of Paid Time off In the U.S.” study, from the U.S. Travel Association, said their employer didn’t encourage or discourage leave, but 17 percent of responding managers aid employees who took all of their leave time were less dedicated.

“Despite the myriad benefits of taking time off, American workers succumb to various pressures-some self-imposed and some from management to not take the time off to which they are entitled,” Adam Sacks, president of the Tourism Economics division of Oxford Economics, said in a statement. “Leaving earned days on the table harms, not helps, employers by creating a less productive and less loyal employee.

“Further, it is a misconception that employers are ahead of the game when workers don’t use the time they’ve earned,” he added. “In fact, stockpiled time off creates considerable financial liability for companies and governments when employees ‘cash out’ upon departure.”

Who’s Getting Paid Time Off?

The same study showed if employees would use just one more day of paid leave time per year it would create an additional output of $73 billion for the U.S. economy and create big benefits for not just employees but also businesses.

Roger Down, president and chief executive of the U.S. Travel Association, said underutilized time off is a huge missed opportunity for everyone.

At the same time, the vacation problem isn’t just about employees not utilizing their paid time off.

Last year research cited by EPI found 24% of private sector workers didn’t have Labor Day 2015 off, and about the same percentage had no paid vacation time at all. Only 34 percent of private sector employees at the bottom of the wage distribution receive paid holidays, and only 39 percent get paid vacation time.

The Advantages of Time Off

While people who have it don’t use it, and many employees don’t have it at all, vacation time, and particularly paid vacation time is good for all involved.

Project: Time Off finds that those employees who take advantage of all their vacation time raise their chances at a promotion by 6.5%, when compared to people who have 11 or more unused days.

Vacation time can also improve positive thinking, which jumpstarts innovation, creativity, and productivity.

Creating Paid Time Off Policies

You may already have a vacation or paid time off policy in place, but it isn’t working the way you’d like it to, or you may be a small business just beginning your venture into these issues as you launch a new strategy.

Regardless of which category you fall into, below are some tips and best practices to make sure your employees maximize their vacation time.

  • You’re going to have to decide whether or not you’ll include your hourly and part-time employees as part of the group that will receive paid time off. This is tricky for businesses because they often feel like they can’t afford to offer employees this time, but there are some advantages. The first is that paid time off can serve as a great benefit when you can’t necessarily offer part-time employees the highest wages. It’s a good way to attract better talent, without having to pay hourly wages you can’t afford. It’s also good to include part-time employees to show them they’re appreciated and a valued part of your workforce. A good middle ground might be offering part-time employees reduced paid-time-off, and providing more time to full-time and higher-level employees. You could also consider giving veteran part-time employees more paid time off the longer they’re with the company.
  • Decide on a system to organize time off. There are software options like Replicon and Kin HR that let you take a lot of the manual work and effort out of offering time off. You can choose software platforms that will automate the tracking of time-off, and you can set it up to integrate with your internal policies. Employees can utilize self-service portals to manage their time off and see what they have left. This is a good way to get more employees to take advantage of available days because they can go into the software to access requests and approvals, so they don’t have to go through the daunting task of asking a manager. It will also help everything operate more smoothly when time off is automated through a software platform, so you don’t have to worry about being understaffed or someone taking advantage of too much time off.
  • Look at your time-off policy as something that needs to be marketed internally. Many employees are hesitant to make use of vacation time because they feel like even though it’s available, it will be frowned upon if they ask for time off. You want to encourage employees to take advantage of any and all paid time off opportunities that may exist, so create campaigns with regular emails and newsletters reminding employees to check on how much paid time off they still have available. Give them fun tips for using their time, and let employees know that not only does it exist, but that they won’t be frowned upon for taking advantage of it. Have employees share their vacations when they get back, and let them know your corporate culture is one that encourages taking breaks so that everyone can benefit as a result.

We’d like to know how you handle paid time off in your office. Who has it and how is it applied and enforced? If you don’t have paid time off, tell us what your workplace does instead, regarding time off and vacations.

April 4, 2016   Updated :November 16, 2016   paid time off, PTO, vacations   

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