They may not be the most glamorous benefits, but employee vacation and sick time are important tools for recruiting and retaining top talent as well as for maintaining a productive and satisfied staff.
We asked Leslie Austin, a human resources executive with Emergent Method, a Baton Rouge-based management consulting firm, for her thoughts on the time-off trends in Louisiana and how companies can design competitive PTO programs that help them stand out to job candidates.
Austin says the Louisiana companies she works with across multiple industries are all offering similar amounts of time off, but differ somewhat on the details of how the PTO programs are structured. Paid-time-off plans that include sick time, vacation time and personal days all in one combined plan, allowing employees to use time off for any reason, are on the rise in the state, she says. But other details of PTO plans can vary by profession.
To better understand the time-off expectations that employees and prospective employees will have, you first have to understand the common PTO policies in your industry. “That’s the jumping-off point,” Austin says. “There’s certainly general standards across professional sectors and a wide variety of industries to offer a certain amount of time off so people have time to decompress, deal with family issues, all these things that are really important for quality of life.”
Once you understand the PTO landscape in your industry, your organization needs to decide whether to meet or to exceed those standards, she says. For example, a company struggling to recruit in a hyper-competitive industry may need to go beyond the industry standard for time off to help attract talent.
Austin also suggests administering an internal study or a focus group to develop a better understanding of what your employees actually want and need out of a PTO program.
Austin says Louisiana employers are increasingly moving away from offering large annual chunks of vacation and sick time, transitioning instead to accrued time off earned on a pay-period or monthly basis. More Louisiana employers are also lumping vacation and sick time together into one. “The rationale tends to be to prevent people from utilizing sick time when they’re not really sick, effectively becoming this second bank of vacation time,” she says.
There are a number of other interesting PTO trends that are slowly gaining favor with Louisiana employers. Some companies are allowing employees to borrow against unearned or unaccrued time, while others offer PTO for volunteer work, which can be an effective recruitment tool for community-minded professionals.
Austin says a few companies, particularly organizations with large groups of salaried employees, are experimenting with unlimited PTO programs. She says these types of open-ended approaches are popular among workers and can help administratively because they significantly simplify the need to track time off. But they still need some structure, she says, such as a clearly defined process to request time in advance, as well as a supportive environment around what is acceptable practice for taking the time.
“Sometimes people without that structure have trouble wrapping their mind around what’s enough and what’s too much,” she says. “A company that goes in that direction has to create a culture where it’s OK to take this time off.”
Austin says it’s important to determine early on in the PTO planning process what you want your policy to look like from a financial standpoint. That means understanding state regulations and how they will affect your company financially. In Louisiana, for example, most vacation and paid-time-off programs are legally an earned wage that is due to an employee upon termination.
“How you run your policy might depend on what the turnover at your organization is and what are the financial metrics associated with that,” she says. “Get some sort of lead accountant or controller to run different scenarios around the policy.”
Tracking PTO can be a huge administrative headache without the proper tools for recording time off that is requested and taken by employees. Austin says that when she helps a company design a PTO plan, she always first inquires about how it tracks employee vacation and sick time.
“Before you design a plan, you need to make sure your system can handle it,” she says. “If you have 200 employees and you don’t have an automated system — if someone’s just tracking that on a spreadsheet — it’s just going to be a mess.”
Austin says that whatever route is taken should be accompanied by a written policy that’s clear about all policies for requesting and taking PTO to avoid confusion or disputes. “It’s important to provide that structure and clarity to people,” she says.
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