Vacation-Sick Time-Personal Time Versus Paid Time Off (PTO)

By Jennifer Blanchard

When employers put together benefits packages for their employees, they include vacation, sick time and personal days. But what many employers are starting to do is instead of setting a specific number of days for each of these three benefits, they are offering Paid Time Off (PTO), which means each employee gets a certain number of days or hours they can use at their discretion when they are sick, want to take a vacation or need a day off for another reason. 

PTO is still controversial in the industry—there are many positive and negative opinions about it. Here is a list of pros and cons so you can make an informed decision about whether this type of benefit would work for your company: 

Pros

• Less absences—companies who offer PTO have noticed a decline in employee absences. Now that employees can use PTO they don’t have to lie about being “sick” to take the day off.
• Helps with employee recruiting and retention—current and prospective employees like that they can take more days off and get paid for it.
• Keeps employee morale high—since most employees are healthy and don’t use all of their sick time, why not allow them to take those extra days as vacation time? It will keep them happy and more productive.
• It allows employees to have more flexibility—with PTO, employees are able to take a day off randomly just because. This will help them when emergencies pop up, such as car trouble or sick kids. 

Cons

• Employees may abuse the privilege—since the employer no longer knows why an employee is taking off, employees could be gone more frequently and for longer periods of time. And those who don’t normally use all their sick time in a year will most likely use all their PTO.
• Sick employees may still come into work—with PTO, many employees will use it for vacation and taking random days off, so they might start coming to work when they’re feeling under the weather just because they’re trying to save their PTO for that week-long trip to Mexico they’re planning for the end of the year.

A good way to offer employees PTO and keep it under control is to manage it effectively. You can do this by: 

• Asking yourself—Does the flexibility of PTO fit with your type of company? Some industries don’t require employees to come to work every single day, where other industries require attendance in order for the business to thrive. Only the employer can know if a PTO policy will work for their company.
• Creating clear PTO guidelines and making sure employees understand the policy—Do you require them to get approval for PTO in advance except for emergencies? What do you consider an emergency? Can they take as many days in a row off as they want? Or will there be a limit?
• Being sick means staying home—make sure employees know that if they are sick, they need to stay home, because coming to work sick and spreading germs will cause more people to get sick and have to stay home, which will then hinder your entire company’s level of productivity. You can counter this by offering enough PTO so that employees can comfortably take a vacation and still have days available in case they get sick throughout the year. 

When employers put together benefits packages for their employees, they include vacation, sick time and personal days. But what many employers are starting to do is instead of setting a specific number of days for each of these three benefits, they are offering Paid Time Off (PTO).