Expanding PTO is a competitive recruiting strategy, new survey says

Dive Brief:

As HR professionals look for ways to compete for talent in an employee-driven labor market, offering generous and more flexible paid time off (PTO) benefits is becoming a key recruitment and retention strategy, according to BerniePortal's 2019 First Class PTO Report. The HRIS service surveyed HR leaders at small and mid-size organizations within the U.S.
Developing and maintaining a competitive and consistent PTO policy is a top concern for the respondents. Nearly one-third of the respondents said the average PTO days held by their workers was fewer than 10 days, and the same percentage of respondents said that increasing the number of PTO days was "the number one change" that their organization was considering making to their PTO policies for 2020.
Only 40% of respondents said they use an online digital tool to manage and approve PTO. One percent of respondents said they offer unlimited PTO.

Dive Insight:

As HR leaders consider how to make PTO an effective recruitment and retention tool, they may want to consider crafting a PTO policy. By combining HRIS, disability and other data, HR departments can estimate the average need for leave based on job categories and roles, Mercer Senior Partner Rich Fuerstenberg previously told HR Dive in an interview. If employees show apprehension over whether taking PTO will hurt their careers, HR can remind managers about the organization's policies and the support mechanisms available to employees taking leave and to those left to fill in for them, Fuerstenberg said.

Expanding PTO in some capacity could give small businesses the leg up they might need to compete for talent against larger, more financially endowed employers. Nearly half of small businesses in a Clutch survey said they offer PTO and 19% said they planned to do so this year.

Some larger businesses are exploring unlimited PTO. Unlimited PTO, which gives employees as much vacation time as they want, is a growing trend that will likely keep growing, Daniel F. Pyne III, a shareholder at Hopkins & Carley, previously told HR Dive. Unlimited PTO does have great advantages: it can be a tool for attracting and retaining potential hires, especially those who think the standard two or three weeks vacation aren't enough; there's no accrued vacation to pay out; and there's no negotiating time off between HR and employees.

But unlimited PTO has a down side, too. Switching from a standard PTO policy to an unlimited one can generate problems, including what to do with all the banked time employees have accrued. Furthermore, a lack of trust between employees and company leaders may make workers nervous to take the vacation time they need for fear of retribution, experts previously told HR Dive.