At a time when benefits are a key competitive differentiator for companies, all good HR teams have to evaluate their benefits packages holistically.
But beyond costs, uptake rates, and other standard metrics, it’s vital to consider how benefits affect overall employee engagement, wellbeing, and culture.
For it’s only when HR teams focus on all these variables, that they will be in a better position to meet the full range of employees’ needs – which will increase productivity and reduce turnover.
Take PTO, for instance.
Summer should put the spotlight on PTO
Even if a company has a competitive PTO policy, this doesn’t mean it’s addressing employees’ actual priorities and concerns.
PTO is a widely underused benefit, partly due to cultural factors such as pressure to minimize time away from the office and continue working while on vacation.
Many PTO plans also fail to meet the rising employee demand for flexibility, and they treat members of diverse workforces as interchangeable. This can make employees feel alienated and disengaged.
But HR teams should lead the way in creating a positive PTO culture – especially over the summer holiday months.
Why? Well summer is the holiday period, but nearly half of American employees say they work at least an hour per day on vacation, while 27% work over three hours per day.
Not surprisingly, some 43% of employees actually think about quitting their jobs while on vacation – and those in this group (those who work while taking time) are 36% more likely to follow through.
The need for new norms around PTO
Despite being one of the most common benefits companies offer, PTO is widely underused.
According to Pew, most employees fail to take all their time off, amounting to huge sums of PTO left unused each year.
Several of the top reasons for this phenomenon will be familiar to millions of Americans: nearly half of employees worry that they will fall behind at work if they take all their PTO, while 43% feel bad for foisting extra work on colleagues.
Other reasons include worries that taking time off will make it difficult to advance, managers discouraging time off, and even concerns about being fired.
Even when employees do take time off, they often feel immense pressure to remain available and continue working while on vacation.
A substantial majority of employees say work is the main source of their mental health challenges, so it’s no surprise that the inability to disconnect is causing stress and turnover.
These findings should alarm HR professionals.
Employees are clearly feeling overworked, and it’s well past time to help them establish a better work-life balance.
How to avoid employee burnout and turnover
Solving this means addressing the culture of overwork, giving employees a wider array of options for using their hard-earned time off and focusing on how PTO (and other benefits) can maximize employee well-being, engagement, and retention.
According to Bank of America’s 2023 Workplace Benefits Report, burnout is the top reason employees cite for leaving a company.
When employees are mentally and physically exhausted by work, they quickly become disengaged.
This can lead to errors, lower product quality, a deteriorating workplace culture, and even safety issues.
Beyond the harmful effects on performance, burnout can lead to turnover – a costly and disruptive problem that can put companies at a severe competitive disadvantage.
Gallup reports that just one-third of American employees are engaged at work, while a majority of employees say they experience “a lot of stress” on the job.
HR teams must take active measures to resist these trends, and the right PTO policies can help them.
For example, the top factor employees cite that will convince them to stay at their current companies is a “good work-life balance.” Employees scrambling to stay on top of work emails and projects from vacation aren’t striking this balance.
Nor are employees taking “unneeded” time off – a common phenomenon, according to research we have published – merely because they don’t want to lose the PTO they have earned.
HR teams can prevent burnout and turnover by encouraging employees to take the time they’ve earned without fear of repercussions and allowing employees on vacation to completely disconnect from work.
It’s also essential for HR teams to demonstrate that they’re committed to employees’ well-being by providing flexible PTO solutions that allow employees to use (or not use) their time off as they see fit.
How the right policies can build a positive PTO culture
There’s ample evidence that PTO is overdue for an update.
Many existing PTO policies – such as “use it or lose it” requirements – place unnecessary stress on employees and make vacation feel more like a chore than a reward.
Companies are increasingly offering unlimited PTO, which can exacerbate the existing cultural problems.
Employees will likely be even less inclined to take time off when it hasn’t been specifically allocated.
Women and black employees are already disproportionately likely to feel uncomfortable or worried about taking time off, and these feelings may intensify under an unlimited PTO program.
HR teams can solve these problems by taking a more flexible approach to PTO.
For example, convertible PTO plans allow employees to either use their time off or reallocate it to other financial priorities: student loan payments, retirement contributions, charitable donations, and so on.
A PTO Exchange survey found 90% of employees say this benefit would make them more likely to stay with their current company.
These benefits can also improve workplace cohesion – 80% of employees say they would donate PTO to coworkers who need it.
We found that employees would make different decisions about spending the money based on their income, gender, and race – a reminder that the current one-size-fits-all PTO model doesn’t work.
When HR teams actively seek to promote healthier work-life balance among employees and offer flexible benefits to help them meet their unique personal and financial goals, they will improve engagement, productivity, and retention. These are all critical elements of a positive PTO culture that will make all employees feel valued partners.