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Employers use paid time off to compete for talent, WorldatWork survey reveals

A new WorldatWork research report finds that a majority of US employers surveyed offer paid time off to compete in the labor market. According to the report, Paid Time Off Programs and Practices, three out of four survey respondents find it necessary to offer paid-time-off programs and do so in traditional and nontraditional ways.

“Time is the new currency, and employers remain committed to providing paid time off as a key employee benefit and reward” said Lenny Sanicola, benefits practice leader for WorldatWork.

Current paid-time-off programs include: the traditional system, which is preferred by large organizations; the PTO bank-type model, which is steadily increasing in popularity; and unlimited leave. Fifty-four percent of companies still use a traditional system, which gives employees separate allotments for vacation, personal and sick days. Forty percent use a PTO bank model (up from 28 percent in 2002), wherein workers receive a pooled number of days off that can be used as needed (generally excluding fixed holidays, jury duty and bereavement). One percent of organizations offer unlimited leave, wherein an employee can take as many days off as needed.

In a Congressional briefing held June 30, 2010, Cara Welch, director of public policy for WorldatWork, said, “With the focus of the Administration and Congress on expanding access to work-life benefits such as paid leave programs, our research report shows that employers recognize the competitive advantage of offering paid time off and believe in continuing these programs, even through the recession.”

Other key findings include:

  • All survey respondents offer paid time off.
  • In a traditional system, 21 days (12 paid vacation plus nine sick days) are allocated on average for one to two years of service; 19 days in a PTO bank system.
  • A vast majority of employers (all organizations with a PTO bank system and 87 percent with a traditional system) provide paid sick leave. The average number of paid sick days in a traditional system is nine. PTO bank systems do not distinguish between vacation and sick time.
  • Employers offer an average of nine paid holidays each year.
  • Fifteen percent of participating organizations offer sabbatical leave programs (typically unpaid).

Data for the WorldatWork Paid Time Off Programs and Practices survey was gathered from February 17–March 5, 2010, among members employed in the HR, compensation and benefits departments of mostly large U.S. corporations. Of the 1,036 responses, 37 percent came from companies with 5,000 or more employees.

Source: WorldatWork