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Workplace Flexibility Is Top Motivator for Employers Implementing a PTO Program

Oct. 7, 2014 — 49% of employers who indicate using a paid time off bank leave system cited granting employees more flexibility as the primary motivator for implementing the program, according to the results of a WorldatWork survey, "Paid Time Off Programs and Practices."

"PTO banks give employees more control over managing their time off and, therefore, offer more flexibility. Employers tend to see PTO banks as an appealing option for attraction and retention and overall ease of administration," said Lenny Sanicola, CCP, CBP, GRP, WorldatWork senior practice leader. "However, this year's data show us that PTO bank-style programs, while appropriate for some organizations, are not for everyone. After considerable growth in use in the past 12 years, the 2014 data show the trend of moving from a traditional leave system to a PTO-bank system seems to have leveled out."

WorldatWork conducted a survey of its membership to better understand employer use of PTO bank systems — typically defined plans that offer a combined bucket of available days to be used for a variety of types of absences — and traditional leave (e.g., vacation time, sick time, personal days) programs and practices. The association conducted similar surveys in 2002, 2006 and 2010.

According to the 2014 report, 56% of respondents reported offering a traditional leave system, 41% offered a PTO bank type system, and 2% indicated "other" as to what type of leave system they offer.

Other highlights:

  • The top three primary motivators for implementing a PTO-bank system are "to grant employees more flexibility" (49%), "easier to administer" (20%), and "to stay competitive with other companies" (14%).
  • For 2010, the top three primary motivators for implementing a PTO structure were, "easier to administer" (38%), "to stay competitive with other companies" (26%), and "reduce absenteeism" (21%). This shows that absenteeism is no longer a top reason; it dropped from 21% in 2010 to 7% in 2014.
  • In 2014, 72% of health-care and social-assistance companies use a PTO bank type system, which is not surprising because PTO banks primarily originated in the hospital industry and in other organizations that have 24/7 operations.
  • Organization sizes between 1,000 and 9,999 are more likely to have traditional leave systems versus PTO bank systems. In larger organizations, it is not unusual to find PTO banks because these programs are easier to administer than traditional systems.
  • Organizations with PTO banks are more likely to offer paid time off to part-time employees (81%) versus organizations with traditional leave systems (69%).
  • In 2010, only 40% of organizations allowed employees to use paid time off as of the date of hire. This number increased to 56% in 2014.

Contents © 2014 WorldatWork. For more information, contact the Copyright Department at WorldatWork.

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