20 Jul Pandemic Causes PTO Pileup
Employees haven’t had the opportunity to take time off during the pandemic. Cancelled Spring and Summer vacations, closed local attractions, and no social reasons to take Fridays off has PTO accrual balances considerably higher than usual. As stay-at-home orders begin to lift (and in some cases retract), many people are still skeptical and cautious about traveling and expanding social circles not to mention many are disinclined to take time off in an unstable business climate. While employees’ PTO balances increase, employers must be thinking about how to best monitor and evaluate implications to their PTO programs…and to their businesses.
Summer, specifically July, is when employees take the most vacation. Constraints and limitations put on traveling, socializing and recreational activities due to COVID-19 mean less people have the desire to schedule a vacation. Employees who are working too much and not taking time off have greater risk of burnout or fatigue. Employers can gauge who is at risk of poor performance by running reports to see who is working too much and carrying a large PTO balance. Developing employee communications to encourage employees to think about utilizing PTO has benefits for both employee and employer.
End of Year Considerations
Workforce productivity and morale are present concerns that for many employers should be managed through to the end of the year. Depending on the PTO program in place any rollover or “use it or lose it” policy may cause stress on end of year staffing. While HR is coming around to understand the implications of a PTO pileup, finance must also be in the know and account for the accruals on the balance sheet. Rollover balances have the potential to impact 2021 planning in both staffing and large PTO payouts if employees are voluntarily or involuntarily terminated. Companies planning a reduction in force, yet this year should anticipate larger PTO cash payouts as well.
Proactive HR Remedies
Reevaluating company PTO policies is an exercise that your team can proactively take to manage significant business impacts. Options or considerations could include administering vacation blackout dates, increasing/decreasing rollover threshold, communicating and encouraging employees to take time off – especially in this contentious business environment.
If your team is concerned or considering adjustments, our consultants can help step your team through a strategy session to update your PTO policy that supports your business and people goals in this business environment.
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