PTO cited as critical benefit for potential recruits

Employees want more paid time off but they frequently do not use the vacation time they already have, finds a new survey from HR benefits administration tech firm Namely. Survey results show that over half of employees claim they typically book a week or more of time off in advance. But in reality the average duration of a time-off request is just 2.34 days.

Nevertheless, employees are prepared to make major tradeoffs when negotiating their compensation to get additional PTO. “What we found is that 87% of employees rate PTO as a high or critical priority when evaluating the total rewards available in a new job,” says Debra Squyres, VP of client success at Namely. “And 20% of employees are willing to give up a higher salary for more PTO or unlimited vacation.”

However, Squyres believes that millennials are driving the trend to taking vacations in short bursts of time which are not planned well in advance. “Millennials are starting to have children and get married, so many requests for time off are related to major life milestones, as well as to attend their kids’ appointments and school events,” she says.

But some employees surveyed by Namely cite rigid company policies (26%) and stress associated with taking longer periods of time away from the office (21%) as barriers preventing them from using up their PTO.

These results validate earlier research that points to corporate culture as a big part of the problem. A study by U.S. Travel’s Project Time Off shows that nearly half of managers surveyed (46%) continue to stay connected to work while on vacation and 53% actually admit to setting a poor or bad example for taking vacations. About 80% of employees said they’d use more of their allotted vacation time if their bosses told them to do so, provided they don’t have to check-in with the office when they’re trying to get away from work.

Workplaces that do not encourage employees to use all of their available PTO may experience lower productivity levels, higher rates of employee burnout and reduced employee engagement. But there are other more tangible costs for both employers and employees when vacation days are left on the table.

In an analysis conducted on behalf of Project Time Off, Oxford Economics discovered $224 billion in liabilities sitting on the balance sheets of American companies due to unused vacation time. America’s vacation liability is massive — and it grew by $65.6 billion in the last year alone.

And beyond the vacation liability companies are shouldering, employees are also losing out. While many unused days are carried over for future use or payout at the employee’s separation, about a third of paid vacation days are simply lost due to “use it or lose it” policies, caps on banked days, or expiration of accrued PTO. As a result, Project Time Off found that employees too are forfeiting massive amounts ($52.4 billion) in earned benefits each year.

Squyers believes the reason some organizations may not implement more innovative or flexible policies encouraging employees to take regular work breaks is that these requests can be difficult for employers to manage, particularly if employees want to take time off with very little notice.

She says one way to give employees more power to easily ask for time off is to provide a mobile app so they can send in their requests properly when they are thinking of them and managers can process them on the fly. According to Namely’s survey, 78% of all employees would use a mobile app to access their organization’s HR tools like time-off requests and millennials are 20% more likely to gravitate toward using an app.

“Our employees are thrilled to be able to submit time off requests from anywhere and it gives me and our managers greater insight into our employees’ plans at any point in time,” says Kathryn Goodick, HR director at Swervepoint, which uses the Namely app for managing time-off requests.