Why leaders are putting a renewed focus on PTO policies

• Key Insight: Discover how employers are redefining leave beyond vacation to attract and retain talent.
• Expert Quote: "More meaningful time off—not just occasional vacation—is essential," says Alex Henry, WTW global benefits leader.
• Supporting Data: Caregiver leave adoption projected to rise from 22% to 39% in two years.
• Source: Bullets generated by AI with editorial review

Employers are putting more focus on attractive paid leave strategies as they search for ways to improve retention and stand out to potential talent.

Seventy-three percent of U.S. employers plan to enhance their leave programs over the next two years, according to new research from global advisory firm WTW. More than half cite improving the employee experience and boosting attraction and retention as top drivers — signaling that paid time off is continuously viewed as a critical tool for staying competitive.

"The standard leave paradigm isn't enough anymore," says Alex Henry, global benefits leader at WTW. "We're seeing a lot more awareness around the need to take more than just vacation or sick days here or there. [Employees want] more meaningful periods of time off to care for a newborn child or an elderly family member, or even to rest and recharge through a sabbatical."

Read more: How Country Maid prioritizes PTO for every life stage

According to WTW's survey, organizations are expanding multiple forms of leave benefits to better meet workforce needs. For example, more than four in five employers already offer parental leave, but 16% expect to enrich those programs. Similarly, 18% of employers plan to expand their bereavement leave by increasing the length of allotted time or broadening employee eligibility. The most significant growth, however, is anticipated in caregiver leave, which is expected to nearly double from 22% to 39% over the next two years.

Two popular ways leaders are investing in these expansions are by adding leave days to existing vacation or sick time that employees can use as needed, or by replacing traditional leave policies with unlimited PTO. However, according to Henry, the most important shift isn't just in the strategies themselves, but in leaders' perspective.

"It's about more than just throwing money at a program to make it better, or to change a vendor," Henry says. "There's this desire to make these benefits appreciated and valued by employees, and that's something that a lot of employers are struggling with in the current environment."

Read more: The fall of personalization and rise of anticipatory benefits

Giving employees the flexibility they want

As organizations restructure or build upon their leave efforts, Henry urges benefit leaders to start by taking a close look at their workforce to understand what employees truly need, and whether the benefits they currently offer are actually valued. 

The goal shouldn't be to provide the richest or most expensive perks, but to ensure benefits are accessible, clearly understood and meaningful. Often, the issue isn't the benefit itself, but how it's communicated and positioned so employees recognize its value and feel empowered to use it, he says.

"Different companies have different nomenclature for their leave benefits, but if you have an organization that really promotes it, we tend to see better utilization of those programs overall," Henry says. "A benefit could be really great, but if leadership isn't being outwardly supportive, employees won't want to use it."

Read more: A new addition to PTO: Heartbreak leave

Sometimes the biggest challenge leaders face is navigating the existing web of leave laws, which vary widely by jurisdiction and can be difficult to interpret and administer. They must work to align their programs within that complex framework while ensuring the benefit remains easy to understand, accessible and genuinely valuable, says Henry. The effort is worth it, he assures.

"If an employer continues to implement richer, more comprehensive programs, they're going to be ahead in any war for talent," Henry says. "When your benefits make sense for your population, are well understood, communicated and utilized, it can be a real differentiator."