Importance of Offering PTO vs. Sick Leave

There’s no question that the advantages of paid time off (PTO) are recognized on a global level. If you’re an employer or administrator, providing a benefits package with separate sick and vacation leave can be a little stressful. It can be scary to imagine losing one of your best employees even for a short while. Some companies offer so many more paid sick leave than paid vacation leave that employees are calling in sick at an unsettling rate. Many argue that offering paid time off, or PTO benefits, instead of specific leave allotted for vacation or illness can be beneficial to companies.

Here are a few importance of PTO over sick leave:

1. Reduce Unscheduled Absences

When you offer your employees sick leave as part of a benefits package, you never know when they’ll be used. As an employer, this can leave you missing an essential member of the team just when a major project is due. With PTO, employees can schedule every day off if they want to. If employees don’t happen to get sick that year, the employer is able to plan for the absences more effectively. Scheduled coverage allows for more reliable managing of responsibilities.

2. Competitive Advantage

If a company wants to attract a quality workforce, it has to provide competitive benefits. A PTO Benefits package is more flexible than traditional time off plans that include vacation and sick days. This could influence an applicant’s decision to work at that particular organization.

3. Lower Administrative Costs

When you provide separate sick and vacation leave, your human resources department has to spend more time keeping track of every employee’s time. Days off must be validated, and this can use up valuable resources. With PTO benefits, you simply have to record whether or not an employee was in the office that day. No one has to worry about the reason for the absence.

4. Increased Autonomy

PTO allows employees to determine when they need to take a break from work. They don’t have to report a reason to their superiors. In return, the increased trust in the employees to manage their own time leads to improved performance. When employees can choose to take a “mental health day” to simply stay at home and recharge after a difficult work week, they return to the office more energized and ready to work. They don’t have to fake a cough or operate more slowly in order to explain the missed work day.

5. Higher Morale

If employees must wait an entire year to get a week of vacation, they’re going to feel burned out by the time their year is up. Performance may dwindle after several months of continued work, and employees may surprise their employer with unexpected absences as the year goes by.

6. Employee Retention

When employees feel valued, they tend to stick around longer. You’ll keep your quality employees when you offer them a benefit plan that makes them feel appreciated. PTO benefits plans makes employees feel empowered. Empowered employees are also usually more inspired and energized to give back to the company with their tenure.

7. Better Work-Life Balance

Employees with adequate work-life balance spend just as much effort focusing on their self-care, personal growth, relationships and individual activities as they do concentrating on tasks at work. This can help reduce stress and enhance fulfillment. Although employers aren’t responsible for creating work-life balance for their staff, implementing a PTO Benefits policy can encourage employees to seek accomplishment both outside of and within the workplace.

8. Lowered Costs

Unscheduled absences can cause a company to lose revenue. You may be required to hire a temporary employee to pick up the slack because you were unable to plan for the employee’s absence. Missed deadlines and neglected responsibilities can affect your sales. When you have to scramble to make up for one employee’s lost time, you’re not working as efficiently as you would if you were able to prepare to cover the missed responsibilities.

9. Less Financial Liability

PTO is considered to be a monetary benefit that adds to an employee’s compensation package. Rolling over vacation time from year to year is a financial liability for employers. With PTO policies, employees typically can’t roll over as many days from year to year. This results in less vacation time that an employer has to cover as employees move up in seniority.

10. Improve Diversity

Your employees may have a variety of cultural backgrounds. PTO allows for diversity because it lets employees take time off for holidays and cultural celebrations that aren’t recognized by the company as a whole. This can attract a more diverse workforce.

11. Reward Loyalty and Service

Most PTO Benefits policies provide more days off with seniority. Employees who have worked at the company longer accrue more time off. This encourages employees to remain with the company in order to take advantage of the reward of time off.

PTO is a more flexible option for rewarding employees. More and more employers are implementing these types of policies in order to recruit better employees, retain the ones they have and improve efficiency in the workplace.

The link below will provide more insight as to how PTO will apply to organizations located within Nevada beginning January 2020.

New Nevada Law concerning PTO Benefits

To learn more on how to calculate these amounts, please feel free to reach-out to us here at SW HR Consultingat 702-979-2119 as we would be glad to partner with you through these important steps.

If you have any questions please do not hesitate to contact us at info@swhrconsulting.com or 702-979-2119.



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