Most employers allot a set number of paid days off for employees to take vacation,
sick leave, and personal
leave. However, paid time-off banks (PTO banks) are becoming more popular, according
to Wayne Wendling, senior director of research for the International Foundation
of Employee Benefit Plans (IFEBP).
"A PTO bank is a benefit in which distinctions between vacation, sick
leave, and parental or dependent care time off are eliminated," says Wendling.
For example, instead of granting an employee 10 vacation days, 5 sick
days, and 3 personal days, a company with a PTO bank would provide the employee
with 18 paid days off to be used for any of those purposes.
According to a recent survey by IFEBP (www.ifebp.org), 30 percent of participating
U.S. corporations offer a PTO bank. Wendling says PTO banks have not been more
widely adopted because HR professionals have been grappling with more pressing
issues (e.g., escalating healthcare and pension costs and increased regulatory
compliance) and, since people are generally resistant to change, the payback
of implementing
a PTO bank may not be perceived as high given other demands of the job.
A Win-Win Situation
It appears that large companies are more likely than mid-sized and small companies
to offer a PTO bank because large companies tend to have more resources, but
companies of all sizes--and their employees--can benefit from a PTO
bank, Wendling says.
The biggest employer benefit is that PTO banks tend to minimize unexpected
absences; employees are more likely to schedule a day off in advance rather
than to call in "sick" on a day they want to take off from work, he
says. PTO banks also fit nicely into a basic philosophy at many companies to
provide employees with flexibility and individual choice, according to Wendling.
In addition, PTO banks help ensure employees' privacy. For example, instead
of an employee asking to take a sick day to go to a doctor's appointment
or have a medical test done, he or she could simply request the day off, Wendling
says.
What to Do
When deciding whether to offer a PTO bank, Wendling says you should consider
questions such as:
- Is there a perceived problem
with the utilization of sick leave?
- Are employees dissatisfied
with the current sick leave and vacation policy?
- If your company has an overall philosophy of flexibility and
choice, how well does a PTO
bank fit in with that?
- Do you have the resources to
properly communicate such a change to employees?
If you decide to offer a PTO bank, make sure people are comfortable with the
change well before it goes into effect. For example, for a change being implemented
in January, Wendling recommends starting to explain the process in early October.
He says it's important to recognize employees' concerns and to focus
on the benefits that employees--not the company--will experience, such
as greater flexibility and privacy. "People are fearful of change, and
in the context of most people's benefits plans, people have been through
a lot of change," he says. "You have to be open and transparent, and
communicate with employees."
