The Simple Solution to Employee Retention: More Paid Time Off

Why You Shouldn’t Underestimate the Importance of Time Away from Work

We Underestimate the Importance of Time Away from Work

At a 2015 survey, when asked which workplace perk they think their employees are most interested in receiving, 41% CFOs said better benefits, and only 19% said more vacation days.

In a separate survey of workers however, vacation days edged out other perks such as better benefits, scheduling flexibility, and training or professional development.

The survey of workers found that paid time off topped most employees wish list – something that most CFOs, managers, and employers are often oblivious to.

Paid time off topped most employees wish list

Bill Driscoll, the district president at Accountemps said in a news release,

“You can’t underestimate the importance of time away from work. Offering additional vacation time shows employees you’re committed to helping them achieve greater work/life balance.”

What is Paid Time Off?

Simply put, paid time off (PTO) refers to any period of time during which an employee does not work but receives regular pay.

Employers tend to not think of PTO as a necessity, but a break from work is essential to tend to personal matters, or simply take some time away from work and return back rejuvenated.

Most traditional organizations offer their employees an average of 10 paid holidays, 2 week vacations, 2 personal days, and 8 sick leaves per year.

Under a PTO plan, employees would simply be credited with about 30 days paid time off, instead of sick leaves, vacations, and personal days.

Does your company need a PTO policy? A survey in 2010, conducted by WorldatWork, a non-profit organization, assessed paid time off practices in the United States and received responses from over a thousand organizations.

76% of participating organizations admitted that they felt the need to offer PTO programs in order to compete for talent. Such companies recognized that the PTO system is a key employee benefit when attempting to attract employees.

All the Best Companies Are Doing It, Why Shouldn’t You?

Some of the best and biggest companies, who undoubtedly employ some of the brightest talents, also have generous vacation policies.

The companies listed below seem to act in agreement that a greater effort towards better work-life balance results in healthier, happier employees and teams.

These companies tend to emphasize trust, and that time off is at the discretion and good judgment of employees.


twitter Employee Retention Paid Time Off

Twitter trusts its employees to assess their own needs to take time off from work, and consequently does not track the amount of PTO days its employees take. Employees can discuss with their managers and teams to plan time off and are frequently given a choice to work away from the office. In the words of Vice President of Human Resources at Twitter, Brian Schipper, “Technology connects us to our work in a way that permeates our lives and blurs the lines of what was previously defined as the ‘work day’. At Twitter, employees are able to communicate directly and efficiently regardless of time zones or geographic locations, whether they are in front of a computer or on a mobile device. Great ideas are hatched, shared and executed any time and anywhere in the world.”


twitter Employee Retention Paid Time Off

Virginia-based auto retailer, CarMax, follows a policy similar to that of Twitter and allows its associates to take as many paid days off as they need. Regarding their time-off policy, Michelle Ellwood from the public affairs department says , “This policy encourages a healthy life/work balance, which leads to highly engaged associates, who are able to provide exceptional customer service to everyone who comes through our doors”. Managers at CarMax believe that the PTO policy has been a much appreciated benefit among all their employees and has significantly improved the work culture.


cisco Employee Retention Paid Time Off

Based in San Francisco, the networking equipment systems manufacturer, allows its employees up to 20 days of PTO, along with 16 hours of floating holidays that employees can take at their discretion. Furthermore, employees are entrusted to discuss with their managers on scheduling time off. The average amount of days off taken per year at Cisco, is 15, so it seems like the company is doing is pretty decent job of keeping its employees satisfied.

Mayo Clinic

mayo clinic Employee Retention Paid Time Off

IT and automobile companies aren’t the only ones that can afford generous PTO policies. A leading medical practice and research group in the world, Mayo Clinic in Minnesota, allow its employees and average of 23 to 38 paid days off per year. Employees can also exchange their PTO hours for cash.

The Benefits of Paid Time Off

Being paid when not working is a great benefit and is clearly appreciated by employees. Here are a a few reasons adopting a PTO policy will not only benefit your employees, but also your organization.

  • Anything that contributes to employee engagement and retention is a clear advantage for an organization. Employees feel valued when they are allowed paid time off, and this results in an improved work culture.
  • A PTO policy allows employees to use their bank of paid hours for whatever and whenever they like, irrespective of whether they are taking a vacation or caring for their health. This provides employees with a sense of independence and trust, further improving the employee-employer relationship.
  • Paid-time off allows for a better work-life balance. Employees have the advantage of taking some time off and returning back refreshed and motivated.
  • PTO policies allow for better work ethics among employees. When employees have flexibility with time off, they are less likely to call in unexpectedly. The sense of independence and trust that employees are given, also results in a sense of responsibility and better communication.

Organizations can model paid time off policies based on their own requirements. Just remember that the goal of a PTO model is to reward employees by offering the flexibility to be paid for days that they do not come to work.

Make sure the model you choose fits with the company culture, has clear established guidelines and a high degree of flexibility. Models can vary based on the number of hours allotted, the way these hours are accrued, the way employees can schedule such hours, and the option to sell unused vacation days or roll them over to the next year.

A good paid time off approach is important for any organization to increase its efficiency and better manage its resources.



Check out this blog post by our friends at Blink! Our Co-founder, Norbers, recently contributed to their article on employee retention.”

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Visit CakeHR if you are looking for more advice on employee retention.

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Bonus Stuff ⛳

As the focus on employee recruitment and retention sharpens in a recovering economy, many executives may be undervaluing a perk their workforce wants most, suggests new research from Accountemps.

When asked which workplace perk they think their employees are most interested in receiving this year, 41 percent of chief financial officers (CFOs) interviewed said better benefits, and 19 percent said more vacation days. In a separate survey of workers, however, more paid time off (30 percent) narrowly edged out better benefits (26 percent) as most desired in 2015.

employee retention

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Pursuing an MSc in Geology, apart from science, writing on HR has always been one of my greatest passions.