Using AI to Enhance the Value of PTO

By Drew Robb August 9, 2021
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day off on calendar

​Artificial intelligence is finding its way into all sorts of HR nooks and crannies. One of the latest is paid time off (PTO).

Companies are using AI-based analysis of PTO internally to understand and optimize vacation and time-off schedules. But multiple companies are also using AI to analyze PTO seasonally as well as across industries and regions and in relation to other factors such as COVID-19 and economic indices.

"Progressive companies are finding ways to integrate AI into their human resource practices so that we can make more relatable decisions for our workforces," said Maria Reis, director, compensation and benefits, for LG Electronics, USA. "Understanding employees' PTO habits can help HR leaders craft new or revise existing employee programs, making them more relevant and meaningful."

She believes a predictive analytics/AI approach can help improve retention and boost recruitment. Reis uses tools such as PTO Genius, an AI platform that helps companies optimize PTO and uncover hidden opportunities to improve engagement, decrease burnout and reduce costs. With this information, LG can gauge how much communication to send to employees concerning time-off campaigns and the topic of PTO in general. As well as showing what programs are working, Reis uses the insights derived from AI tools to spot where the company is overcommunicating about an issue.

"We have built campaigns around taking time off, tying them to travel deals and activity discounts," Reis said. "Employees tend to … take action if you make it easy for them with 'quick bites and a few clicks.' "

Requested Benefit

According to a 2020 human capital study by Aon, PTO is now the second most requested benefit across all workforce generations. Studies by the Society for Human Resource Management (SHRM) support this, finding better compensation and benefits to be the biggest reason why people consider switching jobs, followed by better work/life balance. 

"Trends show that companies with attractive PTO policies tend to land skilled talent," said Adam Gordon, co-founder of PTO Genius. "Optimizing your PTO policy for today's talent and their needs can give your organization a competitive advantage."

Based on an analysis of data across many companies, Gordon said that when work/life balance goes awry, work quality and employee loyalty can diminish. Trickle-down effects can include higher absenteeism, increased likelihood of sick days being taken, higher turnover and lower profitability.

[Want to learn more? Join us at the SHRM Annual Conference & Expo 2021, taking place Sept. 9-12 in Las Vegas and virtually.]

Combating Burnout

Companies face challenges in returning people to the worksite after 18 months of enforced work from home. Employees may no longer wish to face a daily commute. Their lives may have changed dramatically since they were last onsite. Or they may just be burned out.

"Businesses don't have an easy way to identify when employees are burned out," Gordon said.

His company developed technology to drill down through HR and other data to recognize instances of burnout and enhance the employee experience.

One clue that may provide some insight into the burnout problem is the fact that 55 percent of U.S. employees don't use all their paid time off. AI can help supplement HR's efforts to determine why. Surveys show fear to be the main reason: fear of falling behind; of pending layoffs; of returning to a mountain of work; of being seen as replaceable; or of missing out on important projects, decisions or meetings. Even though they are physically away from the workplace while on PTO, some employees feel they should check and reply to e-mail, participate virtually in meetings and check voice messages.

Reis isolated a PTO trend that helped LG address resistance to taking time off: If leaders take time off, employees tend to follow suit.

PTO may only be one element of the burnout puzzle. But applying AI to analyze the effectiveness of existing policies and practices can pay dividends. It can help answer questions such as:

  • Are PTO policies appropriate for the type of culture and employee experience management wants to foster?
  • Does PTO policy make it clear that employees are encouraged to use vacation time to disconnect from work?
  • Which periods of the year should be considered vacation blackout dates?
  • Are existing blackout dates realistic or overly restrictive?

Analyzing PTO also provides a way to group employees for HR action. For example, HR can separate employees into categories based on how much PTO they have taken, such as no PTO in the last six months, none in the last six to 12 months or no PTO in more than a year. This can help isolate individuals who are at the highest risk of burnout. HR can use such analyses to devise targeted campaigns or as part of individual interviews.

This is where automation comes into the picture. New tools can help automate outreach, simplify e-mail marketing campaigns, and stay on top of PTO trends and red flags.

"Investing in solutions that utilize AI will directly boost the employee experience by freeing up HR and managers to allocate time to more valuable tasks," Gordon said.

Drew Robb is a freelance writer in Clearwater, Fla., specializing in IT and business.

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