The New PTO: How to Ensure PTO Days Remain Inclusive

As employees battle burnout, isolation and the temptation to move onto a new challenge, paid time off (PTO) policies are one of the benefits that can turn heads or create loyalty for those considering participation in the Great Resignation.

However, PTO policies are quickly evolving, and practices that were in vogue just a few years ago are changing rapidly due to COVID-19 and the growing desire for personalized benefits. You may be thinking of adding some PTO days to your offering, but before you do, you’ll want to consider how to make these as inclusive and beneficial to all your employees before moving ahead.

A Diversity Focus for PTO

Personalized PTO policies can be a valuable tool in engaging employees from different cultural backgrounds for whom the federally observed holidays may not be something they identify with. Additionally, employees may wish to take time off to be with loved ones during holidays that aren’t part of the federal holiday calendar.

Similarly, workers living in the U.S. but who are originally from (or have family in) another country will appreciate flexible time-off policies because it will increase their ability to travel and see their loved ones.

Like your diversity and inclusion practices, your PTO policy and attitudes around people taking their allotted time off are a direct reflection of your company’s culture. Considering your employee’s wants and needs is essential for developing a policy with the flexibility and value employees are looking for.

However, simply adding PTO days to account for someone who celebrates one of many non-federal holidays isn’t an option as the benefit must apply for employees across the board. There are a variety of ways to do this, including adding personal days, floating holidays and even sabbaticals for employees that need an extended break.

When you think of diversity around PTO, there’s more to consider beyond religious and cultural diversity. Age and the evolving nature of your employees’ lives will also play a role. It’s no secret that Millennial and Gen Z employees highly value time off, and as some of them become parents, they’ll continue to value that.

Older generations are not exempt either. Whether it’s spending time with family or traveling the world, their desire for work-life balance comes, in many cases, in the wake of the realizations accompanied by the COVID-19 era of work.

PTO Policy Framework

The PTO policy you choose will be defined by much more than its structure. Whether it’s a bank-style PTO structure where employees pool time off, an accrued structure where they individually earn more PTO based on how much they work or how long they have worked for the company or even unlimited PTO where this is no cap on days off. The latter has become a popular offering in the past few years but be careful before jumping at the option. If the organization’s culture does not match the unlimited PTO philosophy, employees might use fewer vacation days, negatively impacting the employee experience.

If you structure your policy using a set number of days that are categorized, such as PTO, floating holidays, mental health days and sick days, then you will need to outline and communicate the policy clearly, in writing and in a place where employees can access it with ease.

Make it easy for employees to choose the type of PTO they want to take and make it flexible for them, so they feel your trust and respect to do what is best for them.

In some cases, employees may still choose not to use all their time off. Older policies may have seen them lose it, which can be demoralizing or frustrating for employees. Rollover policies are an option, but PTO can quickly add up to an amount that becomes difficult to actually use in its entirety. As a result, companies are now getting more creative about options, so employees get the most out of their benefits.

Some companies have offered the opportunity to apply unused PTO to their 401(k) or other financial hardships such as emergency expenses and student loan debt. This added flexibility around what to do with PTO is something younger workers appreciate, particularly those struggling to find their financial footing in life.

Another option might be offering PTO for employees to take part in volunteerism. Typically, 1-3 days per year are offered, with approval of the activity required.

Comp time, or time earned for extra hours of work they’ve done previously, is another alternative, but this is limited to employees that don’t receive overtime pay.

Bigger Changes

Your policy framework on PTOs is important, but improving the “work” portion of work-life balance is also being discussed more widely and bears consideration. The four-day workweek is one concept that comes to mind.

Given that all employees will experience the scheduling policy equally, the four-day workweek or reduced hours to a six-hour workday are ideas that some companies have begun to consider.

Four-day workweeks have gained more steam in Europe, where preliminary studies on their impact have taken place. Results have shown mixed effectiveness dependent on the industry. According to a Deloitte report, in healthcare and industries where the boundaries between work and life are more apparent, employees report improved wellbeing and productivity and decreased use of sick days. For industries where flexible work arrangements are currently in place, and boundaries between work and life aren’t as clear, workers struggle to meet deadlines and experience increased stress.

As with unlimited PTO, culture is an issue in cases where these new arrangements struggle to take off. Adjustments that help employees thrive under the new circumstances include shortened meeting times with fewer attendees, adoption of asynchronous workflows and “alignment of managers and workers via culture aligning with policy.”

Whatever you choose, your PTO policies need to evolve toward flexibility and improving the employee experience. The strategy you choose will determine how you meet employee expectations around diversity, inclusion, mental health and work-life balance.

Latest Best Practices

Michelle Jordan headshot

CDO Interview: Michelle Jordan, AT&T

For Chief Diversity Officers, the last few years have been a tumultuous time. Some have sought new roles as former employers failed to deliver on promises and others chased new challenges where they felt they…

Career Advice: Sloane Drake

In this week’s installment of our Career Advice video series, Sloane Drake, Chief HR Officer at Southern Company shares tips  with DiversityInc Senior Business Writer Linda Bell on balancing dual roles.