Factors to Consider When Establishing Your PTO Policies





Few things matter to most employees as much as vacation time, and with good reason — nearly all experts agree that taking some time off can lead to happier, healthier, more productive employees and likewise, careers.

Not only that, but according to Forbes, taking PTO (paid time off) is also better for the health of the economy as a whole. “If workers used all of their available paid time off, the economy [/entity] would benefit from more than $160 billion in total business sales and $21 billion in tax revenues, spending that would support 1.2 million jobs in industries ranging from retail to manufacturing to transportation.”

In spite of the benefits, however, many people are woefully overworked and short on time off. In fact, according to the U.S. Travel Association, “employees rarely use all the time [they are] allotted. Workers, on average, fail to use nearly five vacation days a year.”

One factor that might be contributing to this phenomenon is whether your company’s PTO policies may be discouraging employees from utilizing their vacation time. With that in mind, below are some tips to ensure your PTO policies are working for the good of your employees and company.



Ask for Input

One of the most important steps in establishing effective PTO policies is to get input from your employees.

“Vacation time is one aspect of the benefits package that will be difficult to alter once it has been established, so it’s best to ask your employees what they hope to gain from the policy before it’s set in stone,” writes Lauren Folino for Inc.com.





Enforce Your Company’s Vacation Policy

Given how many employees fail to use their vacation time, and the potential loss of productivity that taking a vacation represents, enforcing vacation time can be a critical factor in a given project’s success or failure.

While some companies allow employees to accumulate and rollover unused time from one year to the next, this kind of policy only encourages employees to put off much needed rest. Instead, choose an arbitrary date when unused vacation time expires. It can be the end of the year, midway through the next year or any date that makes sense for your company/employee — as long as you have a date when unused time expires.

This will force your employees to either use their vacation time or lose it entirely.

Set the Example

It’s often the case that employees are reluctant to take vacations for fear they will be negatively judged for doing so. This can especially be true in a company where the boss has a reputation for never taking a vacation. In that environment, conscientious employees may be more concerned with following the boss’ lead than doing what’s best for themselves.

This illustrates the need for the boss, and management in general, to again, set the proper example. Your employees will translate your actions of always being in the office to mean that they should stick around, and oftentimes, that’s to their own detriment. If you want to keep your best and brightest, lead them by example.





Treat Employees like Adults

One of the biggest mistakes companies make when establishing their PTO policies is by separating medical (sick) and vacation time.

In essence, this creates an environment where otherwise capable adults are treated like schoolchildren who must provide a doctor’s note before being allowed to stay home.

Instead, a far better option is to simply provide your employees with a set amount of time off each year, time they can use however they want, whether it be for vacation, personal days or sick time. This not only dignifies your employees, but also encourages them to use their time off without the need to explain it. The end result is often a culture where vacation time is more widely appreciated and employees are far more productive.



While each company’s management team must decide what works best for themselves, one thing is clear: effective, productive employees must take time off to recharge. By carefully weighing the above factors, you can create PTO policies that will promote the health and welfare of your employees and your company.




Vacation Post-It Photo via Shutterstock

1 Comment ▼


Curt Finch


Curt Finch Curt Finch is the CEO of Journyx. Founded in 1996, Journyx automates payroll, billing and cost accounting while easing management of employee time and expenses, and provides confidence that all resources are utilized correctly and completely.

One Reaction

  1. Aira Bongco

    You’ll know that it is time for a time off when you’re getting too fed up with work. I guess it helps to reset your system so that you can get out of your routine every once in a while.

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