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One of the bigger questions for employers is figuring out how to give people time off – because let’s face it, sooner or later they’re not going to be available. Maybe they have to take a child to the doctor, get their vehicle repaired, or just want to catch some rare social event.

In the old days, many employers granted time off in two forms – sick days and vacation days, both of which were typically unpaid and limited in number. Sick eight days a year when you were only given seven days off? Tough luck – come in and spread the germs!

There’s a better way to handle this, and it’s known as Paid Time Off.

What Is PTO?

Paid Time Off is a vacation model where employees accrue hours that they can use more-or-less at-will to take some time off from work. It might be heading home two hours early for some event or taking an entire week off to spend in the sand and the sun – and most importantly, employees do not have to specify why they’re using it.

The Advantages of PTO

There are four major advantages to the Paid Time Off model.

1. Employees have no incentive to lie. This is always a problem with sick days, but if you’re not asking them to account for their time, then they have no reason to falsify their situation.
   • In some cases, employees might do something like come to work sick because they were saving up a lot of time for a vacation. In most cases, this can be remedied by encouraging them to focus on their health or sending them home early.
2. This model treats employees like the adults they are. You’re no longer in school, and there’s no need to demand that mature, sensible people adhere to a rigorous schedule and overly-strict limits on their time. Your employees want to have a life outside of the company – and when you recognize the rest of their life, they’ll appreciate it.
   • This remains true even if there are times of the year when you don’t allow people to take Paid Time Off unless they’re sick. Most employees are mature enough to recognize when they’re honestly needed. If you do decide to impose a limitation, try to keep it as short as possible – one to two weeks is ideal. The point is for employees to feel like they can use it whenever they want, and if there are too many restrictions, then you’re defeating the purpose.
3. This is my personal favorite, Paid Time Off is viewed as a benefit. It’s a flexible arrangement, where they can use as much or as little as they need. Most employees will end up saving at least some of their time just in case they’re sick and need to use it. The end result – when compared to mandatory vacation time – may be that employees both work more days and have higher morale.
4. Finally, Paid Time Off is easier on the administrative side of things. Each employee has a set amount of time they can take, and managing it is as easy as subtracting the hours they’ve requested from their current pool of accumulated time.

Vacation Time and Sick Days may have worked in the past, but today’s employees expect a better balance between their work and their private lives – and the Paid Time Off strategy is an easy, affordable way to help give that balance.