Paid Time Off Banks Can Reduce Unscheduled Absences
While a growing body of evidence suggests that paid time off (PTO) programs can help to reduce the number of unscheduled employee absences, many employers are reluctant to switch from traditional time off (TTO) benefits to a PTO model, according to a survey conducted by the Alexander Hamilton Institute (AHI), an employment law consultancy.
The 2007 annual “Survey of Traditional Time Off and PTO Program Practices” included responses from 1,734 organizations. Results showed that, while 37% of employers combine paid leave time into a single PTO bank, 63% of employers continue to track sick, personal, and vacation time in separate banks.
When asked why they have not switched to a PTO bank, the reasons cited by respondents included the need to negotiate paid time off with unions, state laws that require payment of accrued vacation time upon termination, and the requirement among government employers that sick time be credited toward retirement benefits. However, many of the employers surveyed told researchers they believe that tracking vacation, personal, and sick leave separately cuts down on the amount of paid time off that employees take.
Slightly more than one-third of both the PTO (38.6%) and the TTO (36.1%) employers surveyed reported that the number of workdays the average employee misses due to unscheduled absences is between three and four days a year. But the differences in absenteeism rates became apparent at the margins: 26.6% of the TTO employers and 20.3% of the PTO employers told researchers that the average employee logs five to six unscheduled absences per year, while 22.8% of the TTO employers and 29.8% of the PPO employers said the average worker misses just one to two workdays due to unscheduled absences per year.
In addition, the survey found, 56.5% of respondents with paid time off programs said they believe that implementing a PTO bank had reduced unscheduled absences among employees. Of those respondents, 54% reported experiencing a 10% reduction in absences; 32.5%, an 11% to 20% drop; and 13.6%, a decline of more than 20%. Among all the employers surveyed with PTO banks in place, 78.4% told researchers their PTO program met their expectations, and 14.6% said the program exceeded their expectations.
“While the unionized and government employers have greater forces to contend with than just convincing its internal workforce that switching to PTO is a good idea, those that cite termination pay or other costs reasons may be short-sighted in their approach and should weigh those costs versus the potential savings of reduced unscheduled absences,” AHI researchers advised.
