How HR/TR Teams Can Help Employees Maximize Their PTO Benefit

Paid time off (PTO) has long been a central feature of benefits packages, but it’s also widely underused by employees. There are many explanations for this: Employees think their workloads are too heavy to take time off, cultural pressures create feelings of guilt and anxiety, and employees worry about missing opportunities at work. When employees leave PTO on the table, this can lead to a wide range of problems — from disengagement and turnover to the accumulation of large unfunded liabilities on the organization’s balance sheet.

As PTO requests and approvals decline, HR departments and their total rewards (TR) function can’t allow this dysfunctional status quo to persist. There’s no point in offering a benefit that employees don’t embrace, which is why a reassessment of traditional PTO policies is necessary. HR/TR teams need to take a close look at how employees are using PTO and whether the corporate culture empowers them to fully disconnect from work. But they also need to consider what alternatives exist to ensure employees’ hard-earned time off isn’t going to waste.

At a time when work-life balance and flexibility are increasingly important to employees, traditional PTO policies are a growing liability. The HR/TR teams that address the root causes of discontent with existing policies and offer other ways for employees to get the full value of their PTO will likely improve well-being, retention, and productivity across the workforce.

PTO Usage is Declining

Although PTO is a staple of benefits packages for many employers, most employees don’t take full advantage of it. According to a 2024 Harris poll, 78% of surveyed employees don’t use all the vacation days that are available to them — even though three-quarters said they wish they could take all their time off. This trend is growing — a BambooHR study from February found the proportion of employees requesting PTO fell by 18% month-over-month and 6% year-over-year. Approvals fell by 9% and 7%, respectively.

Data from the U.S. Department of Labor’s Bureau of Labor Statistics shows paid leave accounts for nearly a quarter of all benefits compensation. This is why a significant decline in PTO usage should be a major cause for concern among HR/TR teams. If employees are using less and less of their PTO, it means the value of one of their most important benefits is steadily diminishing. This can create many issues in the workforce, such as burnout, disengagement, cultural problems and even turnover. In many states (such as California and Colorado), employers are required to pay out the value of unused PTO to employees upon separation. They can face stiff penalties if they fail to do so, which means accumulated PTO also is a major financial vulnerability.

HR/TR teams should determine whether employees are leaving PTO on the table, as well as why this is happening. Once they have diagnosed the problem, solutions may be identified and implemented.

Why Aren’t Employees Using Their PTO?

Recall that three-quarters of employees say they wish they could take all their allotted PTO. This should be a warning light for HR/TR teams, as it indicates employees are struggling to find a healthy work-life balance — one of the most critical determinants of well-being in the workplace. Because many employees lack PTO options, they’re forced to sacrifice the value of accumulated time off, which means forgoing a significant portion of their overall compensation.

The employees surveyed by Harris cited many factors preventing them from taking more time off:

Pressure to be available;
Large workloads;
Guilt about creating extra work for colleagues; and,
Concerns about how they will be perceived by bosses and managers.

A Pew survey reported similar findings. Employees are worried about:

Falling behind;
Missing advancement opportunities; and,
Burdening colleagues.

In the Harris poll, more than three-quarters of employees said they wish their workplace culture was more conducive to taking PTO, while nearly two-thirds said they struggle to find a balance between work commitments and personal time.

Even when employees aren’t working, they feel tethered to their jobs. Almost two-thirds of employees said they have responded to work messages outside working hours, and 60% said they struggle to fully disconnect during time off. These are all urgent cultural issues HR/TR teams need to focus on improving.

Why PTO Flexibility Has Never Been More Vital

It’s no surprise flexibility has become a central focus for many employees. During the pandemic, employers fundamentally reconsidered how and where employees work — a shift that once seemed permanent but is now being rolled back on a large scale. For example, KPMG reported that 83% of CEOs expect a “full return to the office within the next three years.” However, many employees have become accustomed to a greater degree of autonomy, and this attitude extends beyond the overwhelming demand for hybrid and remote work.

According to a global survey of more than 26,000 employees, 83% consider work-life balance even more important than pay. A 2025 report from MetLife found more employees cite flexibility and work-life balance than compensation as a key element of the employee experience. MetLife also reported 70% of employees believe customizable benefits would increase their corporate loyalty.

One way for HR teams to meet the demand for flexibility and address PTO under-usage is to implement a convertible PTO plan. This may enable employees to redirect the value of their unused time off toward other priorities, such as retirement contributions, student loan payments, charitable giving or even leave-sharing pools that allow employees to support their colleagues in times of need. These options provide the flexibility employees need to pursue their unique personal and professional goals.

It’s clear current PTO policies aren’t working for most employees. Considering PTO’s central role in benefits packages, this is a status quo that should be overturned. By reimagining how the value of PTO is awarded, HR/TR teams can ensure employees are fully compensated for their hard work.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics: