Paid Time Off Programs
Posted November 30th, 2010
Although paid time off (PTO) is a popular perk among businesses, it is a program that is not run well at most companies.
PTO at work is nearly universal among businesses, and about 75 percent of businesses in a recent survey said that they offer paid time off to remain competitive.
The survey, conducted by WorldatWork.org, showed that PTO is a practice that businesses definitely want to continue in order to attract and retain qualified employees. Most paid time off programs fall into two main categories: the conventional type where employees are given a set number of days off for vacation, personal and sick days, and a pool-type, where days off are used as they are needed. Holidays, jury duty, and bereavement are not included in the pool, however. The number of companies using this type of program has increased from 28 percent in 2002 to 40 percent currently.
However, another survey has shown that employers are not managing these programs as well as they could, and are losing money and productivity as a result. Most of the companies surveyed – more than 90 percent – said that they do not have a uniform time off program for all of their employees, which makes the program harder to oversee and less effective. Fewer than two-thirds kept records of sick days, and most didn’t know how much PTO was costing the company.
Some 75 percent of the companies surveyed could not give any kind of estimate of how much sick time was costing them. It has been estimated that all types of paid time off – sick days, vacation, and disability – could be costing companies as much as nine percent of their payroll.
Employment experts say that companies need to adopt a more uniform, standard approach to paid time off, one that is more easily administered and closely monitored. This approach could save companies millions of dollars in payroll costs and also help with employee productivity and satisfaction.
To improve the efficiency of time off programs, human resource advisers suggest that companies first take stock of their current program to see if it is doing what it is intended to do and if it is meeting the needs of employees. Then, companies need to find out how much the time off program is costing and set up a tracking program to monitor time off.
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