Posted August 1, 2024

Exclusive: The Importance of a Well-Crafted PTO Policy

A good paid time off (PTO) policy can be a powerful employee retention tool.

By Joe DiMaggio, Jr. – Senior Vice President & Senior Consultant, Kelly Benefits Strategies

Is your organization struggling not only to attract and retain talent but also to keep existing employees engaged and satisfied? If so, you’re not alone. Many distributors and manufacturers in the construction industry are currently facing similar issues. One tool that employers in this industry are not utilizing enough to combat these challenges is a well-formulated paid time off (PTO) policy.  

Making PTO Policies a Priority  

Without sufficient downtime, the risk of burnout is real. A Deloitte survey found that while 87% of professionals said they have passion for their jobs, nearly two-thirds also said they frequently feel stressed or frustrated on the job — 18% said they feel that way every day.

A well-crafted PTO plan is something potential employees look for when job hunting and is appreciated by employees who already have it. Practically, no one relishes the idea of leaving a job for one where they would have less time off.

In fact, there’s a lot of room for improving PTO policy, specifically in the construction and manufacturing industry. According to data from the Bureau of Labor Statistics, construction offers some of the lowest amounts of PTO on average compared to other industries. This means there’s ample opportunity for your business to stand out to prospective employees by offering a well-formulated PTO plan.

Formulating a Valued PTO Policy  

While there is no “one size fits all,” the most effective PTO plans share some similarities.

PTO policies typically include vacation and/or personal time and sick time. How those break down depends on the company, its needs, and the needs of its employees. Some break it down into a specific number of days for sick time, planned vacation time and personal days. Increasingly, many in the construction industry have moved away from this model in favor of combining all types of PTO in one giant “bucket” for employees to use as they like.

Other variables companies must decide on are whether to have PTO accrue over a year versus offering a set number of days at the start of the year and whether to allow employees to carry over unused time off to the following year.  

More and more, companies are starting to include time for “mental health” days in their PTO policies. Some are also including non-traditional leaves of absence, such as for bereavement or family-centric events, such as a miscarriage, as part of their PTO plan. Additionally, different cities and states may have specific rules regarding employee PTO, impacting a plan’s design.  

It’s also essential that upper management visibly buys into and supports the PTO policy. Management should make it clear that they understand the need for employees to get time off and expect PTO to be used. If employees think taking time off is frowned upon, the plan loses its effectiveness in retaining talent.  

Communicating with Employees is Essential

The best PTO plan is useless if employees don’t understand what they’re entitled to. The plan must be understandable and clearly communicated to ensure it serves the company’s and its employees’ interests.  

Ideally, PTO information will be readily accessible to employees in multiple formats. For example, sharing news about the plan through written or emailed memos and a page on the company intranet makes it more likely everyone will see the information, regardless of which platforms they prefer.  

When making a policy change, whenever possible, include information from employee surveys or external data to support the change’s necessity. This can prevent employee questions or concerns and show that the company is thoughtful and deliberate in managing its PTO policy.  

The idea that giving employees time away from work can be a productivity-raising tool may seem counterintuitive at first glance. Yet, we’ve probably all experienced the benefits of having that time off to recover from an illness or mentally escape it all. A well-crafted PTO plan is a vital employee benefit and can be a powerful tool for companies to attract and retain top talent in this challenging labor market. CS

Joe DiMaggio, Jr. is Senior Vice President & Senior Consultant at Kelly Benefits Strategies. He joined Kelly Benefits Strategies (KBS) in 1998 and has over 20 years of consulting and business leadership experience. Since 2006, DiMaggio has been a Senior Vice President and Senior Consultant for KBS.

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