To remain competitive in a tightening employment market, companies are increasing the amount of PTO (paid time off) given to workers. This is especially true for parental leave. Another major adjustment becoming popular is a change how paid leave is structured. We’ll start with that first.
Companies are realizing they have to innovate to be competitive employers. They are finding that paid leave is more attractive when compared to other pay and benefit options.
One program that’s become popular is PTO banks. These incorporate holiday, sick days, and earned time off into one united account. A survey of companies performed by WorldatWork in 2002 showed that 28% of respondents were leveraging PTO banks. As of 2015, the number had shot up to 43%.
More traditional PTO approaches separate vacation, sick, and paid holidays into separate accounting. They are still more widespread but they are in decline.
One advantage for the PTO bank approach is that plans are easier to administrate. Another advantage is that they help reduce absenteeism. And 69% of companies with PTO banks report that they are critical in attracting new employees.
One negative aspect of PTO banks is that they have to be allocated as a liability on the company’s financial reports.
It’s best to consider a PTO bank in situations where the company has a culture that encourages employees to feel like they have more agency and control over their circumstances.
But the big benefit that has everyone talking lately is Paid Parental Leave. More than 18% of companies surveyed have indicated they are offering more family friendly leave options that surpass the mandates in the FMLA. (Family Medical Leave Act.)
For companies that offer advanced paid leave options, 16% report that they offer 6 weeks. Another 16% report they offer 12 weeks.
Here’s one example. As of 2017, American Express is leading the way by offering a full 20 weeks of paid parental leave for mothers and fathers. They are also offering 6 to 8 weeks of extra paid time off for women who give birth and require medical leave.
Employers can set requirements so that employees must meet requirements before they can utilize this benefit. The most generous programs require tenure of 12 months or more before employees can use the benefit.
So should you implement a robust Parental Leave Program?
- Can your business afford it?
- Will employees support it?
- Will all managers from the top down fully embrace the policy?
And as with PTO Banks, the real question is how will this help your company beat out your competitors for talent. Will offering extended parental leave give you an edge?
And even if you can’t afford to offer PTO Banks or 4 months of paid parental leave, look for creative alternatives! Think about ways you can help new parents with their work / life balance. For example, more flexible hours or telecommuting options.
And if you want to review all of your benefit options, be sure to check with us for ideas. We’ll help you find creative ways to show your employees that you care.