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Time off is an important part of maintaining a healthy work-life balance; and paid time off, also known as PTO, is a great way for your company to promote this philosophy. But how do you create a plan that suits the needs of your employees while also keeping your business objectives on track?

Here, we’ll share some helpful tips and tricks to establish and manage a PTO plan that makes sense for your organization.

1. Select a PTO plan

Coming up with a PTO plan that suits your employees’ break needs and your business goals can be a careful balance. Thankfully, there are many ways you can approach time off policies. What’s more, many companies have already done the research and heavy lifting for you!

In this section, we’ll take a look at some examples of some standard and emerging PTO plans to consider.

Bank PTO

A PTO bank policy consolidates all of an employee’s paid time off into a single account from which they can take time off as needed, whether for sick, holiday, or personal reasons. Usually this policy does not require the employee to give justification to their employer, unless they are taking several days off at once.

This option gives all employees a consistent amount of days off as well as the ability to use their time off however they like. However, because employees can use their allocated sick days as vacation time, you may encounter more employees working while they’re feeling under the weather.

Accrued PTO

Accrued PTO gives employees the chance to earn time off over their tenure. This type of plan typically assigns a set number of accrued time off per pay period or month. For example, an employee may earn up to 8 hours of PTO per 40 hours worked.

With an accrual system, PTO can feel like a great reward after a period of hard work, but it can take a long time for employees to build up enough vacation hours to take a real break. This drawback can lead to burnout and employees working while they’re sick.

Unlimited PTO

Unlimited PTO is a more recent addition to PTO policies, but has become incredibly popular over the last several years. Also known as “open” or “flexible” PTO, this plan relies on total trust in your team. This policy does not place restrictions on how much PTO an employee uses, giving them as much time off as they need, within reason. The benefit is employees feel a strong level of trust and get plenty of time to recuperate and establish a healthy work-life balance. The drawback is that some employees may try to take advantage of the offer and productivity could suffer because of it. 

Whether you go for a bank, accrual, or unlimited PTO model, the secret to success is creating well-planned processes for PTO approval and productivity, even while your employees are OOO.

2. Create a process for PTO-approval

As a manager or decision maker, you have the authority to decide how much time off your team can take and when. While you want to be flexible and accommodate to their needs, you also need to take the business’ needs into consideration. To strike a healthy balance between the two, a PTO request process is a must. Not only will this give you insight into who’s in and out of the office, but it’ll also help you plan out workloads and find fill-ins as needed.

Here are a few guidelines to consider as you start drafting up your PTO approval process:

• Set a deadline for PTO requests so that you have plenty of time to plan ahead. Use a workforce management platform to start accepting digital PTO requests.
• Be flexible—life happens, so try to work with your team if unplanned PTO needs come up.
• Establish a first come, first served or seniority approval system so that you don’t have too many team members gone at once. 

3. Consider blackout dates for time off

Most businesses have a time of the year where they need all hands on deck. For tax accountants, it’s between January and April, for educators it’s during the school year, and so on. If you know you’re going to need as much support as possible during a certain timeframe, consider making it a blackout date.

A blackout date can either restrict team members from taking that specific day off completely, or it may limit how many employees may request that day off. If you’re going to implement blackout days, make sure to let your team know well in advance so they can make time off plans accordingly.

4. Add on other options for time off

In addition to PTO days, many companies offer holidays and sick time where employees can take some time to recoup. When you’re planning your holiday schedule, think about what makes the most sense for you and your team. If they’d rather have an extra day off around the holidays, maybe consider that instead of giving them a random day off in June, or vice versa.

5. Stay organized

Organization and communication are key 365 days of the year, but especially when you have an employee out on vacation. If you need to have someone fill in on their colleague’s day off, make sure it’s clear what is expected of them during this time. And since they’re agreeing to take on some extra work, consider setting them up with a little reward, like a gift card, extra PTO day, or a free lunch.

Final notes

When you hired your employees, you made sure that they were hardworking individuals that would help fulfill your business’ mission. If they’ve stuck to their hard work, they should be rewarded. Being generous with PTO is a great way to do that.

As you start to build out your PTO plan, use this document as a guide. Ultimately, your process for creating a dynamic PTO plan will boil down to:

1. Selecting a PTO plan
2. Creating a process for time off approval
3. Blocking out busy dates
4. Adding holidays and sick time
5. Staying organized

Matt Casadona

Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling and music.