The paid time off (PTO) policy that your company chooses to adopt can have a massive effect on company culture. We'll explain what PTO is, what makes a policy good, and 5 interesting PTO policies that could give you ideas.
The Paid Time Off (PTO) policy that your company chooses to adopt can have a massive effect on your company culture. A PTO policy is a necessary aspect of your business once you bring employees into the mix. There are many types of PTO policies, and you must carefully consider your company culture and your employees' wants and needs before you decide on which type is right for you. Below we'll explain what PTO is, what makes a good PTO policy, and 5 interesting policies you could adopt for your own company.
What is a PTO Policy?
In short, this policy describes a set of rules and expectations regarding employee's paid vacation, sick days and personal time in a calendar year. Although there are no federal laws requiring employers to offer PTO, most companies do in order to provide workers with work-life balance and eliminate the need for the employee to ask the employer for permission to take off work, which supports a healthy and trusting work environment.
What makes a good PTO policy?
Simply put, a good PTO policy is beneficial to all parties involved. This means that you (the employer), your employees AND your company as a whole should benefit. When a PTO policy is comprehensive, generous, and flexible, your employees feel valued and cared for, which increases their loyalty to the company, as well as their productivity.
Here are some things you can do to make a good PTO policy:
1. Make it attractive
By this, we mean make it flexible. For Gen Z and Millennials in particular, flexibility in jobs is more important than ever. The main characteristic of a flexible policy is that it bundles all types of PTO, allowing employees to choose which type of leave policies they need.
An open PTO policy also conveys that you trust your employees and do not run a controlling work environment. (Nobody likes a micro-manager 😉)
2. Make it clear and understandable
Make sure your program is clearly understood by your employees. They shouldn't have any questions, and should know exactly what is permitted and what is not.
3. Create a policy based on company culture
An unlimited PTO policy may look great on paper, but it may not work out so well in real life if your business doesn't encourage your employees to actually take the time off. In order to know what style of policy will work best, you have to have a deep understanding of your business, employees, and company culture.
If you're unsure, send an anonymous survey to employees to help you understand how they view time-off culture in your company, and what they would like to see in a policy, and then create your policy with those things in mind.
Now, we're going to go over five examples of interesting vacation policies that your company could consider adopting, if it's a good fit, that is.
1. Fake Holidays
Your company could create a fake holiday throughout the year to give your employees a few extra days off work. One example of this comes from Hanapin Marketing, who declared the second Friday of the second month of each quarter a fake holiday called "2nd2nd," where everyone is off that day, in addition to paid time off for holidays.
2. Volunteering Days
You could also consider adding paid volunteer days to your employees. A software company called Outreach builds in two paid volunteering days per year, and organizes one group volunteer day each quarter to get the ball rolling.
3. Vacation Stipends
Your company could allow vacation stipends each year for your employees and their families to use. One California company called VideoAmp gives their employees a $2000 family vacation stipend every year.
4. Paid Honeymoons
Some companies even offer to pay for their employees honeymoons, after they spend a certain amount of time with the company. One example is Glassman Wealth Services, who pay for their employees honeymoons after they've put in two years of work.
5. Annual Trips
Some companies even put together an annual trip for their companies where they invite their employees and a plus one to the location for the trip.
Now, we're aware that these vacation policies wouldn't work for every business, but we're also aware that a lot of companies like to see others' vacation policies to get their wheels turning with ideas. So, even if you can't use these specific policies, it could help you think of good policies that would work best for your company and employees.