If you let your employees go, there’s a good chance they will not only come back, but will also be more loyal, less stressed, and more productive. So how do you let your employees go? With three simple words: paid time off.
According to The Lockton Survey Report, paid time off (PTO) is a significant issue to employees, so it needs to be a significant issue to HR. Lockton is a Kansas City, Missouri-based international risk management, insurance, and employee benefits consulting company with more than 41,000 clients. The company surveyed 184 executives and professionals from major industries and regional companies in the U.S. (representing over 200,000 employees) to gather a representative sample of human resources trends.
Lockton’s survey revealed that PTO benefits and policies must continue to evolve to reflect the needs of employees. According to Stacie Engelmann, SPHR, SHRM-SCP, Assistant Vice President and Human Resources Consultant at Lockton, “Flexibility is probably the number one reason paid time off is becoming more prevalent as an employee benefit.”
Engelmann says that instead of telling employees how much time they can take off for vacation, sick leave, etc., many employers are putting all of the time off into a single bucket so employees can decide how and when they want to use it. “This kind of autonomy is reaping benefits for employers who implement PTO programs, because their employees feel valued and respected,” says Engelmann.
HR professionals need a thorough understanding of these benefits as they relate to the company’s total rewards philosophy. “Being able to explain to employees the difference between paid, unpaid, and partially paid leave, along with how these options work together, has become extremely important,” says Mark Seely, Lockton’s Senior Vice President and Practice Leader of Employee Benefits. “As individuals are constantly seeking better ways to balance work and personal life, they consider benefits like leave more carefully when deciding whether to accept a job offer or even to remain with their current employer.”
The survey also revealed the following trends:
Vacation benefits are more prevalent than PTO programs among larger organizations (those with more than 1,500 employees).
Seventy-five percent of large organizations provide vacation benefits, whereas only 38 percent of the same organizations offer PTO programs.
The healthcare industry offers the greatest amount of vacation time when compared to other industries. On average, the industry starts at 165 hours for the first year of service and increases substantially from there.
Ninety-seven percent of organizations that do not offer paid vacation offer PTO programs.
Seventy-four percent of organizations that do not offer sick leave have PTO programs.
Other findings include:
Recruitment and retention of talented employees are key driving factors for employers who offer work-life flexibility in their workplaces. The most common form of work-life flexibility is occasional telecommuting.
Forty-five percent of organizations do not track turnover rates, and this rate has been declining since Lockton’s 2012 survey was released, which is surprising, given the growing hype around “big data.”
Engelmann says it’s important to track turnover rates, but more important to understand why it is occurring and how it is impacting the organization. “Careful analysis of employee turnover, with a focus on the factors related to it, can help an organization better understand the impact of company culture on hiring and, even more importantly, on retention.”