The best PTO policy: Is your company in line?
From full-time employees and part-time workers to seasonal workers, PTO is a big factor in the job market.
For CEOs, it can be a constant source of worry. Who should receive PTO? How much PTO is average? How should you handle PTO once a team member has given notice? The balance between being a fair leader and maintaining productivity can be a very thin line, and with a tighter labor market, these considerations can become even more important as you try to attract top talent.
All of this can make it difficult to determine a standard PTO policy for your employees.
At CFO Strategic Partners, we want to solve the puzzle that is PTO. Last week, our team sent out an informal survey to find out how companies across industries handled paid time off. The survey was completed by companies in the professional services, construction, healthcare and nonprofit industries.
The results are in, and we have gathered valuable information to share with your company.
How PTO is handled for each employee category
In the past, the business landscape was primarily made up of full-time workers. Now, there are full-time, part-time and seasonal workers to consider. Our survey found that when it comes to a paid time off policy, businesses remain split on how to handle these classifications. An even number of respondents reported that they provide all employees with PTO as said they provide only full-time workers with PTO. Those who provide PTO for full- and part-time workers—but not seasonal workers—were not far behind.
How amount of time off is determined
When deciding how much PTO to award employees, our survey found most businesses base it upon time with the company rather than an average amount of hours worked.
How PTO is handled when an employee gives notice
Once a team member has given notice, there is much debate on whether or not they should be reimbursed for paid time off earned. Our survey participants were split almost evenly, with slightly more businesses reporting that they do not reimburse employees for time once they have given notice.
How PTO is handled at the end of the year
When asked whether or not employees are able to roll their unused PTO forward, slightly more companies answered yes. Other answers included that paid time off could be rolled forward, but with a max number of hours, and one company shared it awarded unlimited PTO.
How PTO is categorized
In years past, it wasn’t uncommon for companies to allow for a specific number of sick, personal and vacation days. Our survey uncovered that most companies choose to offer all-inclusive paid time off now.
So, what did we learn?
If our survey results represented a company, the PTO policy would allow for all—or only full-time—employees to receive the benefit. The amount of time given would be based on years with the company, and employees would have one set amount to use for any time off, whether they were sick or on vacation. They would be allowed to “bank” that time forward, but that time would not be reimbursed upon giving notice.
Does that sound like your company? If not, that doesn’t mean you’re doing anything wrong. What’s clearest from the number of close results in our survey is that there’s a reason PTO is a puzzle to many CEOs. With a wide range of businesses that work with varying levels of each employee category and a changing job market, PTO, too, is changing.
While there may not be one “best PTO policy” for every business, CFO Strategic Partners can help you create the best one for your business, because we have deep experience working with companies in many industries, and we look at your whole financial picture.
Call us at 407-426-8288 or email Shannon@CFOSP.com, and let’s start the conversation.