PTO?

AngelaTN

We have recently been looking into switching to PTO vs. our current Vacation/Sick policy. I am getting quite a bit of resistance from my superiors that think PTO would be more expensive than our current plan. My CFO has heard that many companies that switched to PTO are now switching back to a Vacation/Sick policy, possibly because PTO ended up costing more or just didn't work they way they thought it would.

Based on the average number of sick days used by our employees, my numbers show that a PTO plan would cost about the same or slightly less than our Sick/Vacation plan. We currently accrue 8 sick days per year, and if we went to PTO, we will convert those 8 sick days to 5 PTO days. We would also convert all currently accrued vacation time to PTO. So basically, the sick time "abusers" would be losing 3 days, but the "non-abusers" would be gaining days to use however they want.

Can anyone enlighten me on hidden costs of PTO?

Also, has anyone switched back to a conventional Vacation/Sick plan from PTO, and if so, why?

Parabeagle

We switched to a hybrid system in 2002. We kept vacation at our current accrual schedule, but eliminated sick leave and bereavement leave (potentially 80 hours per year) and replaced those with PTO (up to 96 hours maximum). So far it has worked well and have seen no appreciable difference -- those who abuse still do, those who don't are ecstatic to have up to five more days of vacation available to them.

jimlegal

We have a vacation policy that has remained unchanged. The number of vacation days is determined by your length of service. Our sick leave policy provides for 96 hours per year. Of which 40 hours maybe taken as personal time for any reason,with the remaining 56 hours to be used for sick. In addition we also provide for 3 paid days of bereavement time for certain immediate family members. We have found by allowing personal time has reduced our overall absences.

sandra_d

We switched to PTO in January 2002 (from vacation and sick) and our costs are up substantially ... so much so that we are probably going to be reducing the number of PTO days that can be accrued during the year. The abusers of sick leave continue to abuse, and have a few days less to abuse - that is true. But, the people who didn't use/abuse sick leave are taking the additional vacation time, and that is adding up to be quite a bit of $$. We have a reasonably generous accrual rate, and a number of long-term employees, so it has added up to a financial negative for us.

NaeNae55

Our sick leave was static and our vacation leave was based upon length of employment (with a maximum accrual for both). We changed it to a PTO without changing the total number of leave time (with a maximum accrual). We have found decreased costs in administration of the policy (only 1 to keep track of) and increased morale. We haven't noticed any associated increase in costs, though it makes sense that there would be.

Those who took off a lot continue to take off, and those who didn't were here all the time. Now that some employees (who didn't take much time to begin with) have reached their maximum allowed, things are changing a bit. They must take time or lose the accrual. This will probably result in some increased costs this year and forward, but it is yet to be determined.

I think changing to a PTO worked very well with us, but it will really depend upon your employee pool and industry. If you have employees who tend to abuse the system, then they will continue to do so.

The Great North Woods

We switched from separate vacation, holiday and sick time off to PTO a couple of years ago. The downside - remaining sick days used to go away at year end - now they do not. The employee doesn't lose them as they are embedded in the PTO.

annie1992

I am a county employee, and our county switched from an extremely liberal vacation/sick policy. The original policy provided for vacation accrual based on seniority (1 week after one year, two weeks after two years, up to five weeks after 20 years) and one day of "sick" time per month, which could accumulate.

A few years ago the county decided that employees could no longer retain their sick banks. They paid off 50% and put the remaining 50% in your retirement account. Vacation not taken is lost, and sick time has become PTO accumulated at .6 hours per month, for 7 days per year. PTO is also lost at the end of the year and cannot be "banked". Recently, the board decided that they didn't want the remaining 50% of sick banks hanging in the retirement accounts, and again cashed employees out....at the rate of 50% to the employee and 50% remaining in the county general fund.

The county has saved a ton of money, but we have some seriously unhappy employees. Wages have always been mediocre at best, but the benefits were good. Now the benefits are being eroded and the wages are less than mediocre. Our turnover is about 40%.

The upside is that I no longer have staff lying about being sick. If they want to go shopping, they tell me they are going shopping because PTO can be used for any purpose. Since neither vacation or PTO can accumulate I encourage, no I insist, that all employees take every day off they are entitled to.

Annie

LindaS

Depending on which survey you read, you will find ones that tell you PTO both decreases and increases the cost to the employer but in my experience, it has a positive impact.

My former employer switched from personal and vacation days to PTO and the supervisors were very grateful. They no longer had to delve into the ee's "mess kit" to determine which type of paid leave the ee should use and allowed them to get on with doing their jobs.

As stated before, employees with poor attendance continued to have it and employees w/o attendance problems remained unchanged but this type of policy treats employees as adults and allows them to manage their time for what they need.