Article
3 min read
Author
Gabriele Culot
Published
January 24, 2023
Last Update
June 26, 2024
Table of Contents
Step 1: Opt for a modern PTO strategy
The most common PTO policies
Bonus PTO strategies to bundle into your paid leave policy
Step 2: Adopt a simple PTO request and approval process
Step 3: Leverage your company culture to combat overworking
Simplify your PTO management with Deel
When thinking about creating a PTO policy, it’s important to take into account your organization’s specific needs. A company’s approach to PTO can have numerous benefits, boosting employees productivity as well as contributing to the company culture.
A good PTO policy can contribute to:
Modern paid time off policies consolidate leave into one PTO bank. Unlike outdated leave systems that allocate specific days for vacation, sick time, holidays, jury duty, and personal days, modern PTO can be used in any increment, allowing employees to manage time off in the most valuable way for them. This approach benefits employers since they don’t have to worry about PTO hours accrual, rollover into the next year, PTO payouts when an employee leaves, or unplanned absences due to employees using their sick days for time off.
Keep in mind that different countries and labor laws might still differentiate certain types of leave, such as parental leave or federal holidays. Take a look at the country-specific information around paid leave.
Flexible PTO takes into account any type of leave: personal, medical, public holidays, etc. Employees are given a fixed amount of days to take. This type of leave is not accrued at the end of the year, nor is it adjusted based on factors such as years of service, educational degree, etc. This type of policy removes the need for an additional HR process. The minimum number of days typically depends on local country or state laws. The minimum amount of PTO required by local law in the world’s wealthiest countries (including 16 European countries, Australia, Canada, Japan, and New Zealand) is 20 days. However, most companies provide additional paid days off for national and public holidays.
If you’re interested in country-specific regulations around leave, have a look here.
Unlimited PTO allows employees to take off as much time as they need as long as they continue to uphold the responsibilities of their role.
During the early days of unlimited PTO, employers found that their workforce took less time off than average due to a lack of clarity and encouragement. You can overcome this by setting a minimum number of days employees must use and centering company culture around trust and accountability.
Unlimited PTO is also an excellent strategy for globally dispersed companies that must comply with labor laws in multiple jurisdictions. Unlimited PTO ensures that companies always exceed the legally required time off minimum no matter where they hire.
Download our Unlimited PTO Policy template for free and customize it to fit your needs.
Mandatory PTO is one of the newest PTO strategies. This strategy emerged in response to research that found employees were overworked yet reluctant to take time off due to work pressures, unclear PTO policies, and stigma.
Simply calling PTO “mandatory” sends the message that employees must use their time off.
Companies can enforce mandatory PTO in a few ways:
A study by Skynova found that more than two-thirds of employees with mandatory PTO rated their at-work happiness as good or excellent. Employees with mandatory vacation days were also 10% more likely to experience good or excellent mental health.
Show your workforce that PTO isn’t just for vacation, personal time, or sick leave. Incorporate alternative types of paid time off into your flexible, unlimited, or mandatory PTO policy.
Consider including the following types of PTO in your policy:
The second step to creating a successful company policy for PTO is to choose a process that makes requesting, approving, managing, and tracking days of PTO straightforward.
Many organizations still require employees to submit time off requests to managers via paper, email, or electronic forms. This approach creates a time-consuming administrative burden and leads to headaches and human errors.
With PTO by Deel, employees can request all types of PTO via the Slack app. Managers can use the same platform to approve and track PTO usage. The plugin integrates with Google Calendar, blocking days off for visibility and automating OOO messages.
In addition, the PTO plugin provides regular vacation reminders and behavioral nudges, prompts employees to re-assign roles and tasks to co-workers, and automatically generated monthly reports.
Once you have the request and approval process in place, document it in detail in your PTO policy. Make it accessible via your employee handbook and share it when onboarding new employees.
No PTO policy will ever be successful in a company that actively or unintentionally celebrates or rewards employees who overwork. If you’re not actively discouraging this behavior, you’re promoting it.
Here are a few examples:
To give your PTO policy the best chance of success, you should:
PTO by Deel is a powerful human resources tool that will help you streamline your PTO management and foster a positive culture that values employee wellbeing, whether you work in a startup or for a global corporation.
Beyond PTO, Deel has many other tools to help you with HR processes: Onboarding, Connections, 1-on1s, Referrals, Pulse surveys, and Org charts.
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