Paid time off is a vital subject in the world of business. For employees, having paid time off is an asset, which is invaluable for accomplishing that essential work-life balance. Nonetheless, making a benefits package that separates sick and vacation days can be a bit challenging for employees.
It can be concerning as well that you may lose one of your top employees, as you do not offer enough paid time off for your workers.
What is paid time off?
Paid time off (PTO) is a policy that organizations institute to enable their employees to be paid for the time that is taken for holidays, illnesses, vacations, personal days, and other times when an employee might not be present at work.
Often, these days are accumulated throughout the year, so the employer could set aside an amount of time that might be based on the number of days of seniority an employee has with the organization.
Time-off benefits could be an important part of any employee benefit packages. Employers are not legally needed by federal law to offer employees days off for state or federal holidays. However, it’s a good way to keep them while offering job satisfaction.
Employers could designate which holidays could take off. It is the same for vacation. There are no federal requirements, but wise employers grant paid sick and vacation days.
What is the importance of paid time off in organizations?
Paid time off is very important to both employees and companies, offering numerous benefits.
- Employees yearn for time off
It’s obvious that employees want some time off of work. They wish to spend time traveling, with their family, handling projects, and pursuing other things. They also benefit in different ways when they leave work.
You see, improved productivity helps employees as much as it does employees. People using all their vacation time tend to receive bonuses and promotions more than their vacation-forgoing colleagues.
What’s more, employees can strike a work-life balance that matches their goals, values, and priorities in life. Striking a balance between personal and professional life is becoming more integral, as awareness of how many hours employees normally work raises.
A report found out that fifty-three percent of employees focus on working somewhat that enables them to sustain a healthy balance. Another study noticed that eighty-one percent of parents rank work-life balance over wage when asked for priority about what they like in a job.
Employees who are not working at all times are more likely to be happier—getting away from the stresses and demands, enjoying time with friends and loved ones, and doing hobbies are amazing for the soul. On top of that, it’s great for everything that has been stated, like productivity as improved happiness attributes to better productivity.
- It benefits employers and the organization
For many companies, their employees have a wide array of various cultural backgrounds. With paid time off, they can accept and celebrate that diversity. That’s because it’s a plan allowing employees to take their time off for holidays and cultural celebrations that may not be acknowledged by the whole company.
Employers offering their employees sick days as a part of their benefits package also supports lowered unscheduled absences. This may leave employers without an important team member when a huge project is due.
When companies have a PTO, employees can easily schedule the days off if needed. If an employee doesn’t get sick throughout the course of the year, employers could arrange for the absence of that person more efficiently. With planned coverage, employers can better handle their responsibilities.
Further, for businesses wanting to attract quality and skilled workforce, employers should be eager to offer or present competitive benefits. With a PTO benefits package, they have something that’s much more flexible than more average time-off plans that are typically made up of vacation or sick days. That may help influence the applicant’s decision to work for the company instead of the competition.
Extended periods without rest raise the potential for burnout. When burnout becomes a concern, employers notice higher turnover rates and end up spending more on training new employees to change those who leave.
With the average cost of hiring new staff, paying for some time off to retain existing employees is more financially recommended.
- It strengthens the economy
Did you know that employees forfeited 206 million unused vacation days in 2016? That number came at a personal cost of $64.4 billion in lost benefits, not to mention the impact on the economy was a lot greater. The overall cost to the economy was estimated to be $236 billion within that year after lost spending was considered.
The consequences that time off has on the entire economy, personal incomes, and job growth are far greater than many people think.
What are the different PTO policies globally?
Governments typically offer their employees more time off than other private companies in America, but the government is somewhat liable for why workers have so little paid time away from work.
America is the only nation that does not mandate workers give at least some paid time off to workers every year. The nation claims ten public holidays, but workers can be obliged to work such days. Other states do not even need extra compensation for doing so.
Among other developed nations, that policy is an outlier. The next-lowered nation is Mexico, but they at least order that workers are provided seven public holidays and six days of annual leave for which they are paid.
Below are other nations that offer time-off to their workers:
- Australia has eight holidays and twenty days of leave
- Japan has fifteen holidays and needs ten days of leave
- Israel has ten holidays and eleven days of leave
- Canada has nine holidays and needs ten days of leave
Moreover, the United Kingdom, Spain, France, Chile, Germany, and South Korea sit at the top of the list with approximately thirty days combined public holidays and days of annual leave. That is an entire month off from work every year. How amazing is that?
Understanding and being aware of paid time off benefits and policies is the ideal way to make a smart decision, especially if it’s something you like to provide your workers today or in the future.