Taking time off is important to employees and business owners alike. Employees desire a life that works for them, and a paid time off policy is an essential part of that. At the same time, business owners want their company to run smoothly, and that requires having engaged, motivated employees. Allowing time off is vital to making sure that you keep the best staff and have the highest productivity.
Paid time off is a challenge for business owners, especially around holidays and during summer months. While employees tend to want and need additional time off, you may also be seeing a spike in your sales and business activity that requires additional work hours. How can you balance the two?
How Paid Time Off Policies Have Changed
Paid time off usually includes holidays, specific religious, national, or cultural observances, and a few extra days away from work. Between 1992 and 2012, paid holidays remained steady. However, paid time off as increased since 1992.
In addition, paid sick leave, personal leave, and family leave has increased between 1992-2012, although it isn’t available to all workers. In 2012, paid family leave was only available to 15% of workers in medium and large establishments, and 8% of employees in small establishments.
As a result of increases in leave policies over the last 20+ years, you’ll find that top talent seeks paid leave plans as part of a standard compensation plan. If you don’t offer it, you may be at a disadvantage. Consider tying paid time off to results or tenure to make it work more effectively for your company.
The Purpose of a Paid Time Off Policy
As was mentioned earlier, paid time off is an increasingly normal expectation on the part of full-time employees. The type of leave has several significant benefits for both employees and business owners.
Because the employment market is highly competitive, attracting and keeping top talent requires generous benefits. Paid time off, in some form, is an important part of that to most employees. Employees benefit from taking time off in many ways:
- Time off allows staff to mentally reset and come back to work with new, creative ideas.
- Productivity increases after employees have had time off.
- Employees feel more satisfied when they have an appropriate work/life balance.
- Time off often gives employees increased focus and improved perspective when they return.
Employees aren’t the only ones that benefit. Employers benefit as well:
- Employees who have the benefits listed above will be better and more loyal workers.
- While having paid time off helps attract and keep key talent, top employees rarely use all of their vacation days.
- Employees who take time off are less likely to burn out, are more productive, and bring more creativity to the job.
- Employees with paid vacation time are more likely to have high energy and a positive attitude, which benefits the company.
How to Implement a Paid Time Off or Vacation Policy
Setting a paid time off or vacation policy requires many considerations. It’s important to plan the rollout of your policy if you haven’t had one in the past, or to communicate more clearly about it if there’s been confusion.
The first factor is to consider the legal requirements of the area you operate in. While employers are not legally required to provide paid time off, employers are legally obligated to provide certain employees with up to 12 weeks of unpaid, job-protected leave each year under the Family Medical Leave Act.
The next aspect to consider is what your goals are in implementing a paid time off policy. This will guide how much time off you offer, what tenure is required, and more. You’ll need to balance being fair to employees with your company’s needs.
Finally, it’s vital to communicate the policy clearly. You’ll need to send out clear instructions about how to request time off, how much time off is allowed, and any special exclusions that apply. Having a clear process established is important to making the vacation policy accessible and fair for everyone.
Creating paid time off policies aren’t hard, but they do take effort and a focus on strategy. I can help you or members of your team develop and execute processes that balance the needs of your business with those of your employees. Contact me today for a free consultation.