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.
Types of Paid Time-Off Models Used | ||||
Traditional Model | Traditional Model | PTO Bank | Other | |
All Companies | 45% | 11% | 41% | 3% |
Number of Employees | ||||
Up to 100 | 46% | 8% | 42% | 4% |
Over 100 to 1,000 | 45% | 12% | 42% | 1% |
Over 1,000 | 41% | 16% | 38% | 5% |
Industry Sector | ||||
Technology | 47% | 9% | 42% | 2% |
Life sciences | 50% | 10% | 38% | 2% |
Other | 30% | 22% | 39% | 9% |
Corporate Status | ||||
Private | 45% | 9% | 42% | 4% |
Public | 50% | 14% | 35% | 1% |
Not-for-profit | 43% | 28% | 29% | 0% |
Paid Time-Off Eligibility Periods
Fifty-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 | 52% |
2 to 30 days | 14% |
91 to 180 days | 13% |
61 to 90 days | 9% |
31 to 60 days | 9% |
Over 180 days | 3% |
Paid Time-Off Accrual Schedules
The 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 | 48% |
Accrual occurs monthly | 22% |
All days are accrued immediately at start of year | 16% |
Accrual occurs daily | 8% |
Other | 4% |
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 | |||
25th | 50th | 75th | |
Traditional Model with specified number of sick & personal days | |||
Designated Holidays | 8 | 9 | 10 |
Floating Holidays | 0 | 1 | 2 |
Sick & Personal Days | 5 | 6 | 10 |
Vacation Days | |||
1 Year of employment | 10 | 10 | 15 |
5 Years of employment | 15 | 15 | 18 |
10 Years of employment | 15 | 20 | 20 |
15 Years of employment | 20 | 20 | 21 |
20 Years of employment | 20 | 20 | 25 |
Traditional Model withoutspecified number of sick & personal days | |||
Designated Holidays | 8 | 9 | 10 |
Floating Holidays | 0 | 1 | 2 |
Sick & Personal Days | * | * | * |
Vacation Days | |||
1 Year of employment | 15 | 15 | 20 |
5 Years of employment | 15 | 20 | 20 |
10 Years of employment | 20 | 20 | 20 |
15 Years of employment | 20 | 20 | 25 |
20 Years of employment | 20 | 23 | 25 |
PTO Bank Model | |||
Designated Holidays | 8 | 9 | 10 |
Pool of Unspecified Days | |||
1 Year of employment | 15 | 15 | 19 |
5 Years of employment | 20 | 20 | 24 |
10 Years of employment | 21 | 25 | 27 |
15 Years of employment | 23 | 25 | 28 |
20 Years of employment | 24 | 25 | 30 |
* 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 permission
Source: Culpepper Benefits Surveys, June 2008, www.culpepper.com.
Data source: Breakdown by industry sector: Breakdown by number of employees: Breakdown by corporate status: Breakdown by country: |
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