4 Types of PTO for the New Workplace

FROM HR EXCHANGE NETWORK / BY FRANCESCA DI MEGLIO

Paid time off (PTO) is of particular interest among employers and employees during this time of transformational change in Human Resources. PTO is getting attention because employers are looking for ways to court both recruits and current employees at a time of labor shortage and the Great Resgination, when Americans are setting records for quitting their jobs. 

At the same time, employees are experiencing burnout and anxiety, which means they are looking for reprieve. PTO can give them necessary breaks to recharge and refresh. HR leaders are finding creative ways to deliver PTO, but even doling out days off need to be examined. Things are not always as they seem. 

Discover the ways PTO is being delivered and determine which options are a good fit: 

Unlimited PTO

Unlimited PTO is a hot topic in HR. Many companies, including Sony Electronics, Roku, Hubspot, Dropbox, and GE offer it among their benefits. This means employees can take as many days off as they need, within reason, and still get paid. Employers have stressed this demonstrates that they trust their employees and that they care about them having personal lives and getting the rest they need to perform well. 

Still, not everyone is convinced. Recently, Goldman Sachs made headlines for beginning to offer unlimited PTO. As a Wall Street firm, it has a reputation for its hardcore culture that has employees on call 24/7 for clients. Its leaders rarely use their vacation days and almost never put up an out-of-office message. 

When Goldman Sachs announced the unlimited PTO policy, the organization also stressed that employees must take a minimum of 15 days off beginning in 2023. Senior bankers who take fewer days of PTO will not be paid for the remaining unused days. The New York Times suggested this was a scam that favored Goldman Sachs over employees. 

After all, the culture of the place and the expectations of clients would not change simply because this policy was put in place. In addition, research has shown that American employees do not take off when they have unlimited days allotted to them, according to the newspaper.

Indeed, the newspaper pointed out that Goldman Sachs' new unlimited policy means that the company will no longer have to pay for unused PTO when people quit. 

"In other words, unlimited vacation allows employers to position themselves as caring and thoughtful, while reducing their own financial investment in it," according to The New York Times. 

Company-Wide PTO

The idea of company-wide PTO is gaining steam, but it is not as popular as unlimited PTO. This benefit has employers shutting down the offices entirely for a week at a time. Everone takes a vacation at once. No one has to request permission for it. Everyone gets paid, and there is no pressure to stay connected because everyone is out of the office and shifting their attention away from work. 

A number of tech companies put this in place during the pandemic. For example, LinkedIn shut its doors and gave its more than 15,000 employees one week off in April 2021. This system works more like the school calendar, where everyone gets a break at the same time. Of course, sick days and family leave are available for emergencies and personal circumstances beyond one's control. 

Many companies had already done this for the week between Christmas Eve and New Year's Day simply because so many employees would take off during that time period anyway, and businesses around the world tend to be slow then. Company-wide PTO comes with less controversy than unlimited PTO. 

Leave Donation

Another possibility is leave donation. In this case, employees donate their accrued, unused time off and sick leave. They add it to a general pool to help colleagues, who are having a medical emergency or are affected by a major disaster like a flood or wildfire. This is another instance where the employer can avoid paying for unused PTO. However, it could give people a hand when they are at their most vulnerable. There are other protections that are not necessarily paid but could protect the employee's job during such an emergency. 

Traditional PTO

With traditional PTO, employees get a set number of PTO, which is based on their seniority. The longer they stay with an employer, the more days they accrue. Often, when they do not use all their days, the employer must pay them for the unused time. These payouts may come at the end of the year or more likely when the person quits and leaves the organization. With so many people quitting at the same time, this has become costly for employers. That may be why they are considering these other PTO options. 

Whatever PTO HR leaders deploy, they are encouraging and sometimes incentivizing employees to use their days. Burnout is the number one consequence of the pandemic, according to the results of a survey of HR leaders in the latest State of HR report. PTO is one way to help employees get some rest and avoid feeling burned out. 

The future of work will have workplaces with different structures and schedules. Many are turning to gig workers, who may not have any PTO because they are considered freelancers. HR leaders, however, will have to consider all the options for PTO to determine best fit for their organization's employees.