August 30, 2022
The United States has a little vacation problem.
That is to say, 99% of employers offer paid vacation leave — but American workers rarely take all of their paid vacation days, leaving the equivalent of $65.5 billion annually in lost benefits on the table.
Oftentimes, this decision revolves around guilt about unplugging and fear of a poor reputation with their boss. But taking time off allows employees to rest and recharge, staves off burnout, and makes for a happier and more productive workforce.
Instead of relying on old practices around PTO, consider some creative practices that will encourage her employees to enjoy their lives (and come back full of energy and ideas).
99% of employers offer paid vacation leave, while 96% of employers offer paid sick leave. This benefit is an especially important element in a total rewards package. In fact, one study found that 58% of employees would take a pay cut in order to get more vacation time.
Ironically, employees with limited PTO may tend to take more time off than those with unlimited PTO. The vast majority of employers offer limited PTO with varying policies on accrual, typically ranging from two to three work weeks a year. Employers with this policy also may need to pay out vacation days employees haven't taken, which incentivizes employers to encourage time off.
Many companies now offer unlimited vacation time, meaning technically employees are free to take off as many paid days of work as they would like. However, each company's policy on unlimited PTO varies in formality of PTO approval.
Studies have also found that employees are more likely to underuse their vacation days than overuse them with this policy. There are several ways to make this policy more effective. To start, it’s important for company leaders to take that time off themselves, and signal to their employees that it's acceptable and encouraged.
Using vacation time to travel is fun — but it also requires money. Consider giving stipends for vacation after an employee has hit a certain mark. For example, give a stipend towards a fourth week of vacation after an employee has taken three.
There's something about summer that makes everyone antsy, whether that's to do outdoor activities, take a long afternoon nap, or simply enjoy the weather. A half day off on Fridays — or the whole day off — allows for longer weekends for travel and leisure, and a happier team of employees.
Encourage employees to take extra time off around the holidays (for example, one to two weeks off baked into the winter season), or simply institute company-wide holidays. Employees will feel less guilty about taking time off if their peers and boss are doing it, too.
For employees who make it to the five-year mark of employment at a company, a sabbatical is a sweet incentive that celebrates their commitment to the company and offers a much needed break. Some companies offer four to six consecutive weeks off, or something luxurious like a $10,000 travel stipend.
All employees deserve to have quality, balanced lifestyles outside of the office. The best way to support them is to give them flexibility to take care of themselves and the ones they love.
Here are some ways to lead the pack:
Parental leave is a big differentiator when it comes to successfully recruiting and retaining employees — many employees at startups are at the age where they're starting families.
The US does not require mandated parental leave, but the Family Medical Leave Act (FMLA) does provide qualified employees up to 12 weeks of unpaid leave. Many companies are now offering between 12 to 18 weeks for paid parental leave, regardless of the gender of the parent.
This helps in multiple ways: parents are able to take time off together to bond with a new addition to the family, or alternate those times in order to give the child more care at home. Studies have shown that first-time mothers who use paid leave are 92% more likely to stay with their employers, making for an extremely effective retention program.
While the US also does not have a paid sick leave policy, the FMLA also requires employers to provide unpaid leave to qualified employees. Most employees receive at least eight days of paid sick leave per year.
A variety of different programs may cover disability leave for employees, from FMLA to the ADA (American with Disabilities Act), to workers compensation programs and company insurance programs. Employers should check up on their local and state laws to see what kind of assistance may be available.
Offering PTO is one thing. Getting employees to actually use it is the next step, and a crucial part of a competitive total rewards package.
By experimenting with new PTO policies, you'll give employees the opportunity to have a longer and more rewarding career at your company.
Most candidates and employees never get to see — much less understand — the full value of their total rewards packages. Many companies are now turning to compensation software tools like Agora to communicate total rewards and boost employee hiring and retention.
Agoura showcases benefits to candidates and highlights the value of all the company’s offerings. From demystifying compensation to PTO incentives, we’ve got you covered. Want to see how it works? Schedule a demo with our team.
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Agora helped Turquoise translate complicated spreadsheets and equity program details into consolidated offer letters with built in modeling tools.
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