The leave landscape has changed this year, yes, but our answer to this question, in a word, is no.

PTO plans have grown in popularity over the past 20 years with an estimated 50% of employers now offering this type of model compared to the traditional time off models that create separate banks of time based on reason (i.e. sick time, vacation time, etc.). The high adoption of PTO plans has been driven by the flexibility they provide to employees while lowering the administrative burden and decreasing unscheduled absences for employers.

With all the benefits of PTO, there is an inherent risk that employees won’t use their PTO time for illness, and instead will save it for vacation time. Before COVID-19 this was a small price to pay for most employers; however, this is no longer the case with so many companies leveraging its use. This potential risk, while critical to consider, should not cause significant concern for employers as there are ways to minimize it without sunsetting your PTO plan.

In this new landscape it is important for all employers – regardless of their PTO adoption – to hit the pause button to ensure their current time off offering remains optimal for their employee population, business model, COVID-19 response plan and strategic direction.

To determine if a PTO plan is still the right approach for your organization, consider the following:

  1. Utilization
    Although your time off data should not be the only thing you consider, it is a good starting point to understand how much time is used, by whom and when. Tracking utilization can help you to recognize absence patterns and discover where deficiencies exist. It can also help to identify areas of your organization that may not be accurately tracking time.
  2. Holistic Absence View
    For most employers, PTO is just one piece of their absence plan. Therefore, it is important to evaluate absence holistically. Plans like salary continuation, short term disability, quarantine leave, etc. are also pieces of the puzzle that must be part of the discussion. Thinking about both plan design and process for all absence plans becomes critical.
  3. Alternative Work Options
    Working from home decreases the likelihood that employees with mild illnesses will “go to work”. This flexibility is important for organizations with aggressive paid time off plans who do not have other paid time available for quarantining if COVID-19 is suspected. Not all organization have this level of flexibility; the key is to ensure care is taken to manage transmission of the virus at work to other employees and/or customers.
  4. Corporate Culture
    Regardless of written policies, corporate culture often dictates not only the approach to absence plans and process but utilization and tracking patterns. Ideally time off should be used to recharge and create balance, allowing greater productivity upon return.
  5. Benchmarks
    Understanding what your peer group provides from a time off perspective is paramount. The most optimal plan for your organization should be in line with benchmarks to attract and retain your top talent. Applicants and current employees will compare time off plans, and in some instances view the flexibility of PTO plans more favorably than separate banks with more days available.

 

As with most benefit programs, time off is not one size fits all.  Comprehensive PTO plans remain a competitive option in the market even during and as a result of the COVID-19 crisis.  The key is to make sure you are taking a holistic view that includes time for  employees needing to take care of themselves or their family members.

To talk about your specific plans or gather more information, please contact Spring Consulting Group.

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Teri Weber

Teri Weber

Partner at Spring Consulting Group, LLC
Teri Weber, ACI is a Senior Vice President with Spring Consulting Group. She has over 10 years of experience in health and welfare plan strategy, design, pricing, and implementation. She also works with absence management programs, including disability, family medical leave and leave of absence tracking. Her areas of expertise have allowed her to work with diverse employers and vendors to streamline processes and programs to meet the needs of insurers, administrators, employers and employees. Teri is on the Board for the New England Employee Benefits Council (NEEBC) and recently served as lead editor for the Disability Management Employer Coalition’s (DMEC) Return to Work Program Manual. Prior to joining Spring, Teri worked with Watson Wyatt, Buck Consultants and AON Consulting. In addition she was an Account Manager with Health Direct, Inc. Teri earned a BS at the University of Connecticut and a MBA at the University of Massachusetts. She holds an ACI designation and is a licensed broker in the states of MA and CT.