Personal Time Off – Yay or Nay?

07/02/2018

Unlike traditional time off policies, whereby leave days are categorized according to vacation days, sick leave or childcare leave, personal time off (PTO) lumps all of these into one category.

On one hand, implementing a PTO policy according the organization might seem to be a fair practice – everyone is entitled to the same number of PTO days and can use the for any purposes as they deem fit. For instance, for employees without family commitments, what would have been considered as a childcare leave to another employee with a newborn or child would be accrued to the same employee as a vacation day. Similarly, if an employee is generally healthy and fit, they can apply what was previously considered as a sick leave as their vacation leave. In totality, the number of PTO days eligible for all employees are the same, regardless of their family commitments or health conditions.

From a HR’s perspective, implementing a PTO policy within the organization might help to reduce the workload for leave administration. Instead of having to manage the various leave type for each employee, managers and HR department simply need to track the number of PTO that each employee has taken.

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However, implementing a PTO policy can also have its drawbacks within the organization.

Employees who are more cautious might end up taking fewer vacation days so as to hold on to their time off in case of an emergency. Additionally, employees with health conditions or family commitments are likely to use most of their time off as sick leave or family leave. This might result in employees feeling frustrated or burnout at work as they do not have any official vacation days.

Likewise, a PTO policy within the organization would mean that the “allocation responsibility” of leave days fall directly on employees themselves. Since it cannot be predicted as to when an employee falls sick, it can be challenging for employees to plan and use their time off appropriately.

Moreover, most companies, if not all, tend to have the option to allow employees to encash any unused annual leave should they resign from the organization. Should employees accumulate large numbers of unused PTO days, this might pose a hefty financial cost to the organization as these employees will need to be paid for their unused time off.

There is no “right” leave policy that fits all organizations. Whether you decide to opt for a PTO policy or the structured leave policy with various leave categories in place depends entirely on the organization’s workforce demographics and the type of culture that you wish you create.

If you workforce is made up of mostly young professionals or employees who prefer a more flexible work arrangement, a PTO policy might be a good fit for the organization.

However, if your workforce is primarily made up of employees with family commitments or in an industry with a traditional mindset, it might be in the organization’s best interest to stick with a structured leave policy.

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This a guest post by RenQun Huang of Gpayroll. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.

About Gpayroll

GpayrollGpayroll is an easy to use, self-run online payroll service that will redefine and revolutionize the payroll industry. Its intuitive and automated system will help business owners focus on their core business without the hassle of managing payroll.

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