Companies Weigh Changes to PTO Policies for Post-Pandemic Times

Rising optimism could spur more employees to play ‘catch-up’ with paid time off

By Paul Bergeron March 17, 2021
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Companies Weigh Changes to PTO Policies for Post-Pandemic Times

​For many employees over the past year, vacationing or using accrued paid time off (PTO) was less a priority for their families than securing healthy living conditions while working and learning remotely.

For those able to work from home, the lack of time off was partially offset by not having to commute. But family obligations often meant that those hours were spent helping family members through their pandemic-related issues.

And in companies that imposed layoffs or furloughs, the remaining employees had more work to do than ever.

Today, company leaders and HR professionals are seeing the cost of a workforce that hasn't taken a proper vacation in over a year. Employee burnout and other mental health issues are widespread, and as spring arrives and the number of vaccinations increase nationally each day, families are thinking ahead to vacation time together.

To be sure, the U.S. is a country where workers don't take much time off, especially when compared to European countries where time spent on vacation is more highly valued. But many company leaders are encouraging workers to unplug from the daily grind and enjoy time away from work. Others are allowing employees to "cash in" their unused days off, especially if the family's income has been diminished.

Combating Burnout

Gavi, the Vaccine Alliance, is a public/private global health partnership based in Geneva, Switzerland, with a goal of increasing access to immunization in poor countries. Needless to say, it's been a busy year at Gavi, said Valerie P. Keels, SHRM-SCP, head of office services for the organization's Washington, D.C., office. Combating staff burnout is a high priority given the workload of the past year.

"As a result, we have lifted the requirement of our 'use-or-lose' vacation accrual for 2021," Keels said, which means that any overages past the normal 10-day carry-over will not result in losing those days. "Staff will have the ability to use any accrued leave from the 2020-21 accrual period through Feb. 28, 2022. The normal 10-day carry-over will resume at that time."

Gavi also extended its work-from-home period through the end of June and will create a more flexible telework policy to complement the existing pandemic provisions for those staff needing the continued option of working remotely.

"We will most likely land on some sort of hybrid provision and give staff more autonomy in making the determination of whether to report to the office or work from home," Keels said.

Across town, the Orr Group works with nonprofit partners to help manage and advise their HR functions. "We've found that many organizations are evolving their stance on PTO, generally," said Shaby T. Rosales, the firm's vice president of HR. "Rigid structures are seeing broadened flexibility, with a greater emphasis on self-care, mental health and wellness. The effects of this pandemic, with its restrictions on travel and the convergence of the work-at-home/live-at-work setting, has taken a toll on the average employee's ability to truly unplug."

Rosales added that among her workforce, "many have not taken vacations in the traditional sense, but we encourage them to dedicate time to refuel and recharge in some way."

Companies are trying a few different tactics to get workers to take vacations, Rosales said. "We've seen a number of organizations move to a use-it-or-lose-it policy this year to further encourage employees to take advantage of these benefits."

Conversely, she added, "We've seen a growing trend with some organizations eliminating vacation policies altogether in exchange for an unlimited approach."

In fact, unlimited time off is fast becoming a popular alternative to managing PTO time, said Michelle May Griffin, an HR consultant in Tampa, Fla. She said one of her clients—a scientific research company operating in multiple Northeastern states—has transitioned from a structured PTO/sick leave accrual policy to unlimited PTO for all employees.

Another client in Florida allowed employees to combine their sick and vacation time into a PTO "bank" to provide time off, but account for it all equally, allowing employees to use the full balance for either sickness, vacation or a combination. And a construction company with projects across seven states provided an additional week off to the already established time-off policy, she said.

"Many companies are paying attention to this aspect of benefits for their employees and changing the formal policy structure," Griffin said. "The hope is the employees will feel heard, cared about and receive the best resources the company can provide."

Evolving PTO Policies Becomes Critical

Biotechnology company Dendreon, based in Seal Beach, Calif., is classified as business essential, which means it maintained operations across the country last year.

"Like many companies, we made a quick decision in early March 2020 to have all nonessential teammates work from home," said Philip Dana, HR vice president. "Through the use of technology, additional communication and a COVID-19 task force of key leaders, we were able to shift to a remote model without interruption in business operations. We also quickly made the decision to strongly encourage all teammates to burn PTO as a way to have a positive impact on earnings [and] to have additional time off during a time of stress and transformation."

Dana said he also took pen to paper. "We immediately updated our PTO policy to allow teammates with COVID-19-related PTO needs to go in the hole, beyond the 120 hours. And on the total rewards front, we added a significant investment in wellness through the addition of a complete wellness plan for all covered teammates," he said.

To help strengthen the company's culture, Dendreon also launched two employee resource groups, three culture committees and several other culture-related projects that ultimately led to a lift of 7 index points (similar to a Net Promoter Score) in the company's annual engagement survey, and a decrease of voluntary turnover by 2.5 percent, said Dana.

"Presently, we are discussing long-term changes to our PTO plan and what the 'new normal' will look like once we are fully returned to work," he said.

(Vacation) Time Is Money

At BHI Insurance Agency in Newark, Del., the PTO policy was changed to disallow rollover "because people had so much time to roll over due to not taking much vacation in 2020, so instead we offered a payout," said Maria Clyde, SHRM-SCP, HR director.

"The extra cash has been a good option for our people," Clyde said. "Also, a few of my clients switched their PTO policies from a calendar year (reset on Jan. 1) to an anniversary year so there's not a huge influx of people trying to be off in December."

Clyde said her company's biggest ask of employees in regard to vacation and time off is that they communicate with their supervisors in advance.

"Everyone was so exhausted from this year that they wanted to take the holidays off, but it left us with no one working," Clyde said. "Last-minute callouts are so disruptive to the team, and we explain that to everyone. Now, of course, there are emergency situations, but we remind our employees that callouts should not become a habit."

As for employee burnout, Clyde said, "I recommend to my clients that they always check with their existing benefits policies to see if they have access to an employee assistance program. That provides many confidential, free resources to employees struggling with life's stresses." 

Paul Bergeron is a freelance writer based in Herndon, Va.

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