Frequently asked questions:
What should you consider before choosing the best Paid Time Off System?
As the times are changing, so are changing the minds and trends followed at the workplace. More professionalized education and ever-increasing competition has not only upgraded the status of workers but also revolutionized the culture of organizations.
Unlike the old times, the employees are no longer considered a source of over-exploitation. Instead, the organizations have started taking care of their human resources as their most important assets. They have changed their solo motto of maximized productivity and profitability by the new mantras like “shared growth and mutual benefits.
Both the employers and the employees have understood that life is not merely about working. Employers now recognize the importance of employee-freedom, while employees acknowledge their rights. Today’s employees no more get allured solely by the figures that an organization is paying. They wisely analyze the other benefits and move only towards those corporations who value their skills and take care of their other necessities.
You know that every individual has his/ her personality, interests, needs, and personal life. Now, imagine you are working in an HR department within a large corporation: you receive daily dozens of requests for vacation days from the other employees. Either they need to relax, go to a doctor, visit their parents, or pick up the child from school, there will always be reasons why an employee needs days away from work. It is your job to verify these requests. Suppose the employee is entitled to a break when he/ she is requesting. If yes, for how many days. And you must do this all day every day. Feeling tired and overwhelmed? I feel you.
On the other side of the coin, there’s a different landscape: imagine you are working continuously for weeks and months, and if you need a vacation for reconnecting with yourself, relaxing on the beach, painting a room, or taking care of your sick child, you can only have it on your own expense.
These two situations meet in one place: you are that person!
But do not despair! Working hard with no vacation in sight sucks while getting paid for not working sounds too good to be true. The solution is just around the corner.
Instead of differentiating between personal vacation days, national holidays, maternity and parental leave, and sick days, many companies move towards a general paid time off (PTO) tracking software. These tools can be used at the discretion of the employee and balance personal and professional priorities. This employee tracker allows for more flexibility to accommodate everyday life demands while also fulfilling the needs of their work schedule on their terms, which often translates into happier, healthier, and more productive employees
What Does Paid Time Off mean?
Paid Time Off (PTO) is a benefit offered by many companies allowing employees to take off for a specific number of days and still receive compensation. PTO includes absences related to vacation, illness, or personal circumstances.
The Paid Time Off policy gives the employees access to a pool of hours, which can be used later as per their requirements. This time-off accrues in proportion to the duration for which the employee has worked within the organization. This policy can vary according to various legislation.
Offering paid time off (PTO) to employees often returns to the employer in the form of the employees’ physical and mental health, attitudes toward work, and increased productivity. Paid vacation and sick days help keep employees’ physical and mental health and well-being balanced by offering enough paid time off to accommodate personal and family commitments while keeping profitable businesses. Disconnecting from work, especially from a stressful or demanding job, will afford work staff to take a welcome and well-deserved break from the daily activity, allowing them to rest, relax, and rejuvenate. And when they return, they will have gained a new perspective on a project, be more productive, and be more connected with their colleagues and managers.
On the other hand, not offering PTO (or employees not using PTO) can cost businesses a great deal of money. Employees who are overworked and stressed eventually get burned out. Their productivity decreases, and they may lose interest or passion for their job. The lack of efficiency can have many adverse effects, including missing work because of illness, reduced productivity, and lack of creativity and innovation.
Implementing and setting up a PTO policy protects both the worker and the employer. Employers may draw up an official PTO policy that requires the employees to fulfill precise requirements before they can start using PTO. The validation may be the specific number of hours, days, weeks, or pay periods worked. Some policies calculate accrued PTO based on the company's employee number or based on employee classification.
To protect the company workload and customer service, managers may require that employees send their PTO requests at least two days before notice unless they are genuinely sick. As needed in their company, HR managers should set up other guidelines for employee sickness, vacation, and personal time before adopting a PTO policy.
What Are the Advantages and Disadvantages of a Paid Time Off Policy?
Here are seven advantages of Paid Time Off:
- Employees feel valued when they are allowed paid time off - which contributes to employee motivation and retention.
- Employees can use the PTO tracking system and dispose of their hours whenever they like (with manager approval) and whatever reason they choose.
- Employees who have paid time off benefits have the advantage of getting refreshed by getting away from the work environment.
- Flexible paid time off programs allow employees to choose when to take time off.
- When employees have flexibility with time off, they are less likely to call in unexpectedly, allowing for more consistent coverage of responsibilities.
- Paid time off benefits are part of a total compensation strategy and can attract “difficult to recruit” employees.
- Paid time off benefits make employees feel empowered to make decisions about personal needs.
But with every silver lining comes a dark cloud, so here is a compilation of some disadvantages of Paid Time Off:
When an employee is not in the office, someone may need to cover their responsibilities, which can be challenging, particularly for smaller organizations.
- Paid time off is an expensive employment benefit added to the total compensation cost.
- Managing Paid time-off benefits is necessary. Employees need to learn to budget their hours, so they keep a bank of hours when required.
- Employees tend to view all PTO time as vacation time and come to work when they are sick. Managers in the organization need to set the pace and expectations and model proper behavior for employees.
- Picking the best PTO policy for the business is not that easy for the employers. All the different approaches hold their own sets of positives and negatives. Employers and HR Managers need to understand all these pros and cons to choosing the most appropriate and balanced policy for their organization and employees.
What are some of the best Paid Time Off policies:
Traditional PTO is one of the most common PTO policies which brings out separate allowances for personal, vacation, and sick days. The paid days off under this policy are often calculated based on employee tenure at the organization. This reward of retention attracts employees for a longer stay at the company.
On the downside, this policy carries a risk of inaccurate time-off reporting due to the division of the time-off days. Also, it increases the possibilities of unscheduled absences of employees once they reach their maximum allocated days. Such an absence not only affects the efficiency of the workflow, but traditional PTO policies can lead to the occurrence of distrust at the workplace.
Further, traditional time-off policy not only demands a strict process of time-off request and approval but also requires employee time-tracking. While small organizations can quickly meet these requirements, they become complex and tiring for larger companies.
Flexible PTO is also known as PTO Bank-Type System. This policy offers a lump sum of PTO days to employees, empowering them with the freedom to decide the way they want to spend. Be it a family trip, the first day of school for the children, or a doctor's visit, employees can use the time-offs as per their requirement.
Flexible PTO is considered ideal for working parents as it privileges them to take occasional days off for addressing the school events or health issues of their children. It is also perfect for the employees who enjoy celebrating occasions other than the national holidays.
Unlike traditional PTO, this policy is uncomplicated and easy to administer. It still requires employee-time tracking. It needs the employers to track the accrual rates, limits, and payout of the employees. Moreover, it mandates the employees to request and gets their time-offs pre-approved from their manager.
This relatively new concept is gaining popularity, among the technology-based start-ups. Unlimited PTO gives employees freedom of taking as many paid time-offs as they need, being unconcerned about reaching any limits. Most start-ups are adopting this policy to attract and retain the best of their organization's talent. Moreover, this policy frees the employer from the liability of paying accrued time-offs.
An unlimited PTO, though there is no limit on paid time-offs that an employee can take, the employee still needs to get prior approval from the manager. Unlimited time-offs while at one side can attract potential employees; at the other, it can also lead to the culture of too many unnecessary absences from work. Moreover, this policy can also stress the employees about taking too much or too few time-offs compared to others.
The PTO software market is getting richer every day with new products, all designed to manage entire teams, satisfy both the workers’ and employers’ needs, and be compliant with the labor legislation. So, while the Paid Time Off policy is one of the tools of attracting the potential pool of candidates, choosing the best PTO is a pain. The organization and HR departments should thoroughly evaluate all the advantages and disadvantages of the PTO tracking software before adopting the one that fits the best. It is the most beneficial for their specific domain.
Here are six reasons why you need to start using a PTO Tracker:
No more sticky notes & excel spreadsheets
According to HR Tech World Spring Congress research, 78% of HR managers are frustrated by managing employee forms. A PTO tracker gives your business one standardized method for managing and tracking PTO for all the employees, meaning you will never have to deal with stray notes, complicated excel timesheets, and non-compliant requests ever again.
Investing in an employee PTO tracker means that the process of requesting and approving time off works significantly faster. This can benefit both employees and your HR department, as:
Employees can book time off or call in sick from one portal, and access the PTO policy and see how many days they are entitled.
HR managers can access and compare all time-off requests, approve/ decline easily, and plan their business schedule accordingly.
Keeping all your employees’ time off details in one single cloud-based platform can end the hassle of scheduling nightmares. In turn, this will allow you to make business plans quicker, without making any mistakes, while also giving your team the freedom to take their PTO whenever they choose.
Keep it compliant and accountable
We know compliance is a concern. A PTO tracker keeps tabs on the precise days an employee is entitled to, meaning you will never be taken advantage of. It is an automated solution that lets you track sick leave trends within your business, helping you keep your team as happy and productive as possible.
Gathers all information in a single report
The overall payroll hours report compiles all the general, overtime, and PTO hours for the pay period and features built-in timesheet approvals to make your job easier. Say goodbye to hunting and gathering data from multiple systems or copying and pasting information into a spreadsheet.
Streamline the managers’ approvals
Approving your employees’ timesheet never has been more accurate and more comfortable. Managers do not have to send countless emails or wait for employees to hand in their requests - the approval workflow handles all of it, with timesheets attached for easy review and one-click approval.
A paid time off model aims to reward employees by offering the flexibility to be paid for days that they do not come to work.
PTO is good for business. Vacation time leads to happier employees, and happier employees are more efficient and work more productively.
Paid time off is essential for employees and your bottom line. With a clear policy, planning, and encouragement, offering PTO becomes a way to retain top talent who genuinely love working for your organization.