In today’s world, every organization is trying to provide its employees the best in terms of compensation, benefits, and more. One of the significant parts of that is benefits like paid time off — from vacation to sick time. However, managing everything with manual processes can not only get cumbersome and time-consuming but also lead to unforeseen challenges for the business.

Luckily, managing employee PTO doesn’t have to be tedious. However, there are various factors that you should consider while developing a PTO policy. A good PTO policy is vital for both employees and employers. A comprehensive and flexible PTO policy will make your employees feel valued, which in turn will increase their loyalty and productivity.

We talked with a few industry experts to get their thoughts on how to do PTO tracking right and what makes a good PTO policy. Pavel Stepanov, CEO of Virtudesk, shares that a balance is needed: “A great PTO policy cares for the employees. At the same time, it maintains the quality of services the company provides. There is no disadvantage in creating a robust PTO policy. In fact, it gives you a lot of advantages in managing your employees’ attendance and productivity and contributes to their well-being. Allowing your employees to take a paid vacation eases their minds and lessens their stress at work. Given that, it is important that your policy includes procedures such as who will be doing their work while they are on leave so as not to affect the company’s operation and quality of work.”

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So, How Can You Build a Great PTO Policy?

Here are some best practices for creating a great PTO policy:

Provide Employees with Flexibility

Flexibility has become an area of prime focus, particularly for the current generation we call millennials and Gen Z. They are more attracted to jobs that provide them with added flexibility and benefits. Therefore, you must ensure that your PTO policy factors in this part. It should be able to bundle up all the types of PTO, allowing employees to choose according to their needs.

Jennifer Hartman, HR staff writer at Fit Small Business and a former HR manager for a technology consulting company, offers a few ideas on what this flexibility can entail: “Offering a robust PTO policy can increase job satisfaction and improve performance because employees have a sense that they are experiencing a good work/life balance. A robust PTO policy can include additional days off (more than the typical two weeks), adding non-traditional days off (birthday, floating holiday), and offer quick-use days when an employee might not be able to give advance notice. Some employers offer unlimited PTO. The advantage to this is that employees are able to use PTO when they need it without waiting for time to accrue.” 

A flexible and open policy makes sure that your employees trust you and do not run away because of a controlling ecosystem.

Define Clear Guidelines

It is important that you set clear rules and guidelines for your PTO policy. This information should be accessible to every employee in your organization and any changes to the policy must be communicated appropriately to avoid any mismanagement.

Aimie Ye, SEO Manager and HR Blogger at GoCo, feels that one of the critical factors for setting up a PTO policy should be allowing PTO carryover. Ye says, “If your organization doesn’t currently allow the set amount of accrued or unused PTO to be rolled over, you may want to reconsider. Because many employees didn’t get to use their PTO last year, their PTO runs the risk of being wasted, and your employees might feel unmotivated and burnt out.”

PTO policy may vary across locations and job profiles. As such, you must ensure that all your employees are covered by this policy to promote a more inclusive environment.

One way to do this is with a PTO software, such as Replicon. You will be able to do complete management of global paid-time-off policies while ensuring compliance with all relevant local, state, and federal laws and regulations. You will get a single repository for storing and maintaining all records on paid time off. With Replicon, you can build and implement any number of policies across your organization, irrespective of the locations your company operates in.

Get Input from Your Employees

You may have a good understanding of the company culture, business goals, and industry standards; however, when it comes to creating a new PTO policy, it is best to get input from the employees themselves.

To this purpose, you can send out anonymous or non-anonymous surveys to your employees and get feedback on your current policies and find out what else can be incorporated to make them feel more valued. The suggestions obtained from a survey will help you shape your PTO policy in the best way possible.

Encourage Time off to Avoid Burnout 

Although some companies ask their employees to take compulsory time off, employees are often unable to utilize their PTO hours due to the workload and prior commitments. In contrast, some employees may want to accrue their leaves so that they can use them in the future.

Having a policy where accrued vacation time gets lapsed at the end of the year may not always work in your favor and demoralize your employees even further. You must motivate your employees to focus on their mental health and encourage them to take time off to reduce stress.

Ye offered some unique insights specific to post-COVID updates, which can be considered when building a new policy, “We all know that the COVID-19 pandemic resulted in canceled plans, vacations, and events for your team members. These changes and cancellations are severely impacting the way your employees take PTO. For most, it means employees are taking far less PTO — and because of this, your robust policy should reflect these.” 

Ye also suggested that organizations should consider adding compulsory days off: “Because of the time-warp that COVID-19 was (and still is in many places), your employees may not even realize just how burnt out they are. Working from home blurs the line between work life and personal life, so it may make sense for you to require a few mandatory days off in efforts to reduce accrued PTO and improve productivity.”

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Offer Alternative Opportunities

Sometimes your employees may not want the time off for themselves and will be willing to donate their unused vacation days to their coworkers who have exhausted their own quota of leaves. In some cases, employees may even opt to donate the amount from the PTO towards different charitable causes or volunteer work.

Having these options creates a positive mindset among your employees since they can contribute their PTO hours in a more meaningful way. In addition, these initiatives also promote an organization’s philanthropic goals while, at the same time, proving an effective team-building exercise.

Choosing an Employee PTO Software

The right way of creating a paid-time-off (PTO) policy is using a time-intelligent unified PTO tracking software like Replicon. The software will be a vital add-on to your employee time and attendance management process.

As Sison at Fit Small Business says, “Tracking employee PTO for a mid-size to the enterprise-level organization is best handled through your payroll provider or an all-inclusive HR software. This type of software is equipped to handle multiple PTO requests from employees and typically has a feature to allow a supervisor to approve or deny the PTO. Additionally, employees and managers have access to days used and can monitor available PTO time.”

Here’s how the right paid-time-off software will add ease and automation to time-off processes and let you or your businesses define custom leave policies and communicate them across the organization:

• Employees can take paid time off at their own preference, and at the same time, it will give you (employers) control over unscheduled absenteeism.
• The overall process will be streamlined as all the data related to leaves will be stored on a single platform, ensuring employee flexibility and no delays.
• You’ll get significant savings as it will reduce overall time and money spent on manual work.
• Transparency and visibility will result as the system will be available to everyone at any time, anywhere.
• A software increases ease of use as applying or approving a time-off request will be a matter of just a few clicks.

Selecting the right PTO software for your business can be quite a challenge. You need a solution that will provide flexibility to ensure your workforce feels valued, minimize the administrative burden, and ensure that your organization fulfills all the compliance requirements.

To make the selection process simple for you, here are some features you should look for in PTO software:

• Flexibility: It should let you create time-off vacation and other policies, set accrual rules, carryovers, overdraw limits, and effective dates to model your requirements as per your business need.
• Anytime, anywhere access: Employees should be able to submit time-off information anytime, anywhere, with or without connectivity, and the data should sync in seconds. They should also be able to upload documents and add comments to provide additional context and information.
• Compliance: The software should have a prebuilt rule library to stay on top of time-off and sick leave compliance requirements as compliance rules vary as per locations or company agreements. Time-off compliance ensures consistent policies across the workforce and prevents any compliance issues.
• Time-off calendar: This provides real-time information about employee time-off schedules, tracks employee attendance on any given day, and ensures your projects are adequately staffed with available resources to minimize last-minute scrambling for replacements.
• Seamless integrations: You should be able to integrate the software with other existing systems within your organization’s ecosystem.
• Analytics and visibility: The software should provide real-time visibility into organization time-off usage and availability and configure reports to match your organization’s reporting needs.

In short, a time-off solution should give you flexibility and the ability to automate time tracking and ensure compliance with policies. The right solution helps you achieve success by letting you create a time-off policy according to your needs.

Knowing how to implement the best paid-time-off policies is critical, depending on your organizational requirements. With Replicon, you get a robust and unified time intelligent system that can track PTO and solve other time-related challenges across your entire organization. To learn more about Replicon and how we help businesses achieve success, read our case studies of other organizations that have used our platform.

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