Small businesses are discovering it is getting harder to find talent in an economy with historically low unemployment. Not only are they competing with businesses in their segment, but also large enterprises.
This means they have to get creative to find and retain the available talent in the marketplace. And according to a report from BerniePortal, Paid Time Off (PTO) could be the way to do it.
In the survey for the report, BerniPortal says one-way SMBs are doing this is by offering a modern and flexible PTO policy to update their overall compensation package.
In the report, the company says PTO is an important compensation agreement. Adding, “To remain competitive with new hires, as well as reducing turnover among current staff, it is important to ensure your organization’s PTO policy is up-to-date, in-line or better than peer employers, and standardized among team members.”
The participants in the survey are HR leaders at SMBs in the U.S. across a wide range of industries. This includes technology and professional services, restaurant and retail, public service and nonprofits, healthcare, manufacturing and others.
Approach and Policies
The two most common types of PTOs are annual allotment and accrual bank. With the annual allotment, the number of days expire or rollover during the year. The date can be the beginning of each new year or the date the person starts working. An example is 10 days per year, which can roll over with up to three days from one year to the next.
With the accrual bank method, PTO is accrued based on a predetermined schedule. This can be monthly or quarterly up to a given limit. And once the employee reaches the limit, more days can’t be accrued until some of the days are taken. An example of this approach is 10 days per year, accruing monthly, up to a limit of 20 days.
When it comes to the actual PTO days held by employees, the number ranges from one to unlimited. But the majority have 6-10 PTO days at 30%, this is followed by 1-5 days at 24%, 20+ days at 20% and, 16-20 days at 17%. And there is also one percent of the respondents in the survey who say they have unlimited PTO days.
So How are Businesses Managing their PTO Requests?
According to BerniePortal, building a PTO policy is half the battle. The company says managing requests and approvals is some of what takes up the most time for HR. The other challenges they face are staffing concerns; creating and maintaining a competitive, consistent policy administration; tracking and reporting; employee education and communication.
They use online PTO tool (40%), written requests (35%), email (18%), and verbal requests (7%) to manage their policies.
For small businesses, there is a great opportunity to streamline these processes. By using the right set of tools and technology, they can be automated. This will allow HR staff to focus on higher-value tasks.
You can read the full report here.
If you really can’t afford more PTO, consider a 4-10 work week. Basically gives your employees 3 day weekends every weekend but still allows them to get the required work done.