Do Not Overlook This Powerful Recruiting Tool

October 16, 2017 in HR Best Practices


That Recruiting Tool is Paid Time Off

Although Americans are notoriously bad for not taking their vacation time—even when they’ve accrued it–paid time off (PTO) remains one of the most attractive benefits employers can offer. So, when you’re hiring, don’t underestimate its importance as a recruiting tool. Having outdated PTO policies or offering minimal vacation, sick, and personal time can turn potential candidates off. Generous policies, on the other hand, can help you secure your next dream hire. Here’s what you need to know about why PTO matters so much.

How important is PTO to employees?

It turns out PTO is very important indeed. Studies show PTO is second only to health insurance in terms of benefits that matter the most to workers. In fact, most workers saythat flexible hours, more vacation time, more work-from-home options, and unlimited vacation time could give a lower-paying job the edge over a high-paying job with fewer benefits. Furthermore, 63% of US workers would refuse a job without PTO. And who could blame them?

It’s important to note that PTO doesn’t just mean vacation time. Employees are looking for a benefits package that also includes paid holidays, sick leave, and even personal days and time off to volunteer. Some of America’s highest rated companies for PTO, which include IKEA, Google, General Motors, and Costco, offer generous benefits in this department. Unlimited sick leave, three weeks of vacation that bumps up to five weeks over time, and the chance to earn or buy additional leave are all common practices.

Workers with families, in particular, want flexible PTO, while for Millennials it’s non-negotiable.  Organizations that offer paid parental leave are perceived as more attractive and caring employers that are in touch with the pressures of family life. They’re also more likely to retain their workers.

Netflix, for example, now allows salaried employees to take as much paid time off as they want in the year after the birth or adoption of a child. Facebook currently offers four months of paid leave for new parents, and recently updated its policies to give workers paid bereavement leave and carer’s leave. No wonder it’s consistently voted one of the best companies to work for in the country.

Most Americans don’t use all of their vacation, so why offer more?

Believe it or not, more than half of all American workers never take their full annual vacation time. So if you’re an employer, why should you bother offering them a great PTO package? Because, ultimately, it’s what they want. The problem is many workers fear that if they take vacation they’ll fall behind in their work, come back to a heavier workload, and be discriminated against by their bosses. Whether or not it’s actually true, that’s the perception. Yet the vast majority of employees also said if they felt fully supported and encouraged by their boss, they would take more time off.

So not only do you need to offer a generous PTO package, but you also have to foster a culture in which employees feel free to take time off. When you’re recruiting, emphasize that your organization provides this leave with the expectation that employees will take vacation time and any other personal leave they might need. Having lots of paid leave available is meaningless if your employees feel discouraged from using it.

Some companies have instituted unlimited vacation policies, often with surprising results. For example, one company we know of decided to place its trust in its employees and allow them unlimited vacation time for a year. Surprisingly, the employees didn’t take more leave than they had under their previous accrued vacation time policy. But knowing they could made them happier.

Essentially, the employees were more satisfied because they were entrusted to make decisions for themselves about their workloads and PTO requirements, and could easily adapt to changing family or personal circumstances. Just knowing they could take as much leave as they wanted or needed, in a flexible way, made them happier and more productive. And no one abused the privilege.

With Americans working harder than ever, the prospect of meaningful, flexible leave that caters for many of life’s circumstances is incredibly appealing. Companies that offer good PTO packages are the ones that will attract the best candidates and retain the best workers. Is it time to update your PTO policies?

Editorial Note: The content of this blog originally appeared in the September, 2017 edition of ABR Employment Services e-newsletter,  HR Insights. It was written by Lyla Rozelle, Lifecycle Marketing Manager at Jazz.