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More flexibility for PTO programs
When designing a competitive and comprehensive total rewards plan, it is important to consider the value of paid time-off (PTO) benefits to employees and the cost to your organization. Results from a recent Culpepper Benefits Survey show that an increasing number of employers are improving their PTO benefit programs by making them more flexible and generous. (A demographic breakdown of survey participants is provided in the box at the end of this article.)
Types of Paid Time-Off Models Used
Most surveyed organizations (56 percent) use a traditional PTO model with days allocated to specific categories (e.g., vacation, holiday, sick & personal leave), while 41 percent have PTO bank models combining vacation, sick and personal days into one pool, allowing employees to take time-off for any reason.
In addition, 18 percent of companies allow employees to cash out unused vacation and PTO days.
Traditional Modelwithspecified # of sick & personal days
Traditional Modelwithout specified # of sick or personal days
Number of Employees
Up to 100
Over 100 to 1,000
Paid Time-Off Eligibility PeriodsFifty-two percent of companies allow new full-time employees to take paid time-off immediately on hire. One-third of companies require new employees to wait over 30 days before they can take paid time-off.
Paid Time-Off Eligibility for New Full-Time Employees
Immediate upon hire
2 to 30 days
91 to 180 days
61 to 90 days
31 to 60 days
Over 180 days
Paid Time-Off Accrual SchedulesThe most common schedule for accruing paid time-off for existing full-time employees is biweekly.
Paid Time-Off Accrual Eligibility Schedules for Existing Full-Time Employees
Accrual occurs bi-weekly
Accrual occurs monthly
All days are accrued immediately at start of year
Accrual occurs daily
Number of Paid Time-Off Days The table below shows the number of days provided by paid time-off model, type of time-off and tenure.
Number of Days by Paid Time-Off Model, Type of Time-Off, and Tenure
Traditional Model with specified number of sick & personal days
Sick & Personal Days
1 Year of employment
5 Years of employment
10 Years of employment
15 Years of employment
20 Years of employment
Traditional Model withoutspecified number of sick & personal days
PTO Bank Model
Pool of Unspecified Days
* Some traditional models allow an unspecified number of sick & personal days.
W. Leigh Culpepper, CCP, GRP, CBP, is president and CEO of Culpepper and Associates Inc., which conducts worldwide salary surveys and provides benchmark data for compensation and employee benefit programs. Jeremy Greenup, CCP, is a research analyst at the firm.
Reposted with permissionSource: Culpepper Benefits Surveys, June 2008, www.culpepper.com.
Data source:Culpepper Benefits Survey of 279 organizations, March-May 2008.
Breakdown by industry sector:Technology:Software 30%; IT services 11%; telecom/Internet services 7%; hardware & electronics 6%; aerospace & defense 3%; eBusiness 3%; semiconductor 3%; other technology 4%.Life sciences: Biotechnology 4%; medical devices/equipment 6%, pharmaceutical 2%; research services 2%; other life sciences 1%.Other industry sectors: 15%.
Breakdown by number of employees:Up to 100: 37%; 101 to 1000: 43%; Over 1,000: 20%.
Breakdown by corporate status:Public 65%; private 31%; not-for-profit 3%; government 1%.
Breakdown by country:United States 83%; Canada 4%; Australia 3%; Taiwan 3%; United Kingdom 3%; Other 4%.
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