Employers banking on paid time off

Offering time away from the office is still a leading form of attraction and retention in many employers’ arsenals, and the move from traditional vacation and sick leave to PTO banks continues to expand.

Roughly 63% of organizations say they’ve moved to PTO plan policies, up from 50% in 2013 and 38% in 2010, according to Mercer’s recently released Survey on Absence and Disability Management.

But the move doesn’t mean all employees are taking full advantage of their options. As the study notes, 44% of participants report that employees are taking less than 80% of their allotted PTO time.

“One of the reasons that employees don’t use PTO time is that the culture seems to frown upon it,” says Rich Fuerstenberg, a senior partner in Mercer’s Health & Benefits business. “Having the company’s senior leaders not just take PTO, but talk about the benefits of doing so through social media, can help.”

For example, he says, pictures showing the CEO spending time with his or her family or telling a story about an idea they got while on vacation sends a message that it’s OK for employees to take PTO.

Other challenges, including a growing telecommuting workforce, are adding to the problem of employees not using all of their PTO.

Some companies are revisiting how PTO, especially sick time, can be used, he says. “Rather than just using PTO for the employee’s own condition, many employers permit employees to take sick time to care for a sick family member,” he says, noting that roughly 75% of survey respondents permit sick time to be used for care of an immediate family member or for other personal matters.

“Such flexibility can increase usage,” Furstenberg says. Further, he adds, employers can provide employees with guidelines or training on how to use PTO appropriately, something one third of survey respondents say they’ll do.

Paid parental leave is also making a big move to the center stage of PTO plans, as seen in the announcement earlier this week of American Express offering 20 weeks of paid parental leave.

Generous parental leave policies were implemented by a number of companies, particularly in the tech space, Fuerstenberg notes.

According to the survey, 24% of responding companies provide paid leave parental leave for the birth parents, and 25% say they provide paid leave to non-birth parents.

In addition, the survey points to employers turning toward outsourcing FMLA administration as policies become more intricate. According to the survey, the number of employers outsourcing moved slightly up from 38% in 2013 to 40% in 2014.

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