Is Your PTO Policy Designed to Recruit, Retain & Satisfy the Best Talent

As we wrap up 2017, a year of exploring the changing nature of a workforce increasingly influenced by millennials and their shifting priorities, it’s worth taking a second look at your company’s holiday vacation policy. Is it antiquated and anti-productive, or forward thinking and a tool you can use to recruit and retain talent that is increasing in value as the IT skills gap widens. 

Here’s the deal. For Boomers and Gen Xers, standard paid time off policies are unsatisfying, but not intolerable. These older generations came of age and built their careers upon the sort of traditional sick, personal, and vacation time off policies that have existed for decades. Marry this with the nose-to-the-grindstone work ethic and, frankly, materialism of those generations with constant connectivity, and you have a perfect storm of counterproductive stress that carries significantly more downsides than it does advantages.

If you’re thinking, “I give what the government and market tell me to give, and my obligations end there,” you’re not wrong. Frankly, federal law apparently cares very little about ensuring working conditions keep up with the digital transformation and evolving best practices. You, as an employer, aren’t legally mandated to give employees any paid time off, per the Fair Labor Standards Act (FLSA).

In certain industries and certain geographies, you may be obligated to provide paid time off per union collective bargaining agreements. In the white collar sector, it’s standard best practice to provide a certain amount of paid leave, dependent upon the employee contract. The BLS reports that the average amount of vacation time in the U.S. earned by employees varies by the length of time that they have worked with their employer:

• Workers with one year of experience average 11 days of paid vacation.
• Employees with five years of experience average 15 days of vacation.
• Workers with 10 and 20 years of tenure average 17 and 20 days respectively.

The (if you think about it) utterly bizarre thing is that despite the miserly paid time off average Americans get compared to workers in other industrialized nations, 54 percent of them ended 2016 with unused time off, according to the U.S. Travel Association’s Project Time Off. Let’s put this in perspective, shall we? That equates to 662 million vacation days washed down the drain by people who have earned them.

“As workplace technology continues to advance, it’s no surprise the typical workday has evolved, especially during the holiday season. Around Christmas, your cubicle may be someone else’s couch,” says Kevin McMahon, Director of Global Marketing at West Unified Communications. “For employees with the option to work remotely, taking paid time off has become less of a necessity.”

In fact, a recent West UC survey reveals that nearly 70 percent of employees admit they’ve worked remotely as an alternative to using their PTO, including working while sick, while caring for a sick family member, and any other number of reasons that before our current age of constant connectivity, would have necessitated an employee taking the entire day to focus on what they needed to do to be healthier rather than splitting their attention between personal matters and work.

On top of that, half of full-time employees say they plan to take advantage of their company’s policy to work remotely this holiday season, maximizing PTO days. And West’s research showed that 42 percent of respondents admit they check emails at least one or two times daily when off the clock for public holidays, and 66 percent say they will check their work email at least once on Christmas Day.

Remember the good old days before the smartphones and laptops when the end of the year meant mandatory days off that could be entirely devoted to spending time with family, traveling, or just vegging out on the couch in your PJs eating Thanksgiving leftovers and watching black and white holiday movies on television? Odds are that you returned to work a little more relaxed, refreshed, and ready to tackle the new year. 

But these days, there are several factors that contribute to Americans workers’ increasing reluctance to take time off. They fear the mountain of work that will greet them upon their return, worry their job functions will suffer due to their absence, or have concerns that employers won’t think they put in enough effort.

The thing is, though, there are sacrifices for that kind of…well, sacrifice. According to Project Time Off, a significant majority of managers (82 percent of those surveyed) agree that paid time off has positive benefits on the health and well-being of employees, in addition to boosting company morale (82 percent), and alleviating burnout (81 percent). But in clear contradiction to those numbers, a full two-thirds of employees feel their “company culture is ambivalent, discouraging, or sends mixed messages about time off,” a share that remains essentially unchanged since 2014. 

It turns out those aware and concerned managers are on to something. The study also says that employees who don’t take their allotted vacation time are lower performers, less likely to be promoted, less likely to receive a bonus, and—duh—far more susceptible to burning out.

So what gives?

By and large, it’s the relatively recent phenomenon of constant connectivity that contributes to the ‘never on vacation’ mindset. When you can scan your work email from your phone, you’re far more likely to do so, whether or not you’re opening Christmas presents, relaxing on a holiday beach vacation, or arguing with the fam at the Thanksgiving table.

“Employees are always feeling the pressure to be online. One out of five workers said their employers expect them to be connected if they’re able,” said McMahon. “Twenty-three percent of respondents said they are working remotely this holiday season to avoid getting swamped with emails.”

Look, we get it. As a small business owner, giving employees the ability to work remotely rather than take paid time off eliminates a lot of administrative work tracking how many sick days versus vacation days their employees have used. That option is particularly attractive to employers in those geographic areas where employers are required to allow staffers to accrue sick time, usually up to 40 hours a year depending on how many hours they work. With PTO, there’s no need to track hours worked or accrued.

We’re not saying you should eliminate remote work flexibility in order to make sure your employees get their mental health days, because we’ve seen again and again that remote work is a growing trend and more of a millennial demand every day. On the flip side, we’re well aware that there are employees who will take advantage of flexible work remote policies to ‘call in hungover’ on too many Mondays or invent reasons to ‘work remotely’ on Fridays in order to extend their weekends. But let’s be real: If those employees are stealing time from you, it probably isn’t due to your PTO policy. No matter how strict you are, they’d still find a way to cut corners.

There are so many options, however, available to employers. Some (though, admittedly, fewer and fewer every day) employers don’t issue company laptops so their employees can’t take work home with them. Others give may offer fewer flexible PTO days but close their offices during a certain period, such as the week between Christmas and the day after New Year’s Day (Full disclosure: This is our parent company Informa’s policy, and we think it’s awesome.) Some prohibit work from home arrangements on Fridays and Mondays, some only allow a certain number of days to accrue and carry over into the following year, and a growing percentage actually offer Discretionary Time Off, which essentially places no cap on an employee’s PTO days, as long as it doesn’t interfere with the company’s processes and productivity.

Our point is that if you want to avoid engendering that little kernel of resentment—no matter how small—among your employees or watching them work themselves into a useless frazzle by being ‘always on,’ there are workarounds presented by the same constant connectivity that helped cause the problem in the first place. Think creatively, talk to your employees, and research some outside-the-box alternatives.

Otherwise, you may find yourself left with a grumbling pool of aging employees and a stale, outdated work environment—not to mention a workforce of virtual zombies, braindead from never taking a brain break.