Organizations are leveraging their time-off benefits to attract talent in today’s competitive labor market. This was a key finding from the “2019 PTO/Paid Parental Leave Programs & Practices Survey” conducted by WorldatWork, with underwriting support from PTO Exchange.
WorldatWork defines paid parental leave as paid leave for use by new parent employees to recover from the birth of a child and/or to care for or bond with a new child.
The survey, which was based on 532 responses from WorldatWork members, revealed that 68% of organizations market their PTO bank to attract talent, while 61% of organizations that offer a traditional time-off system do the same.
The survey also found that three in five organizations (60%) feature their paid parental leave to attract new employees.
“This survey highlights a critical shift,” said Scott Cawood, president and CEO of WorldatWork. “Organizations that deliver benefits like paid time off, flexibility and paid parental leave — benefits that provide a great work experience and a great life experience — are often valued higher by employees than other rewards like salary or health benefits.”
Key Findings Regarding Paid Time Off
- Most employees do not have to wait to take time off after starting a new job. 52% of organizations allow immediate use of vacation time benefits and 63% of organizations provide immediate use of PTO bank (pooled vacation, sick, personal) time benefits.
- Progressive employers are allowing paid time off alternatives. One in four employers allow employees to redirect unused paid time off. For example, a donation to colleagues who need it to utilize the time off instead of themselves (20%), to redirect the cash-value of unused time off to their 401(k) (2%), or to convert to a donation to a not-for-profit that is important to them (2%).
- A considerable number of employees do not maximize PTO. 37% percent of employees do not use all of their PTO each year. However, employers that establish plan guidelines help promote higher usage. For example, in organizations with “use it or lose it” policies, only 19% of employees lose some paid time off.
- Paid military service time and paid time to volunteer are on the rise. 49% of organizations offer paid military service time, compared to 39% in 2014. 35% offer paid time off to volunteer, compared to 22% in 2014.
“While the survey shows that companies are beginning to offer flexibility around benefits, employees need choices that support their station in life,” said Rob Whalen, CEO of PTO Exchange. “Allowing employees to self-direct their unused PTO for emergencies, 401(k)s, health savings accounts, student loans, or giving to a nonprofit or colleague they care about is important and provides generational equality to the employee community.”
“More companies need to view PTO as part of an overall employee compensation package which is earned and accrued through the process of their work, productivity and the value they deliver to the company and shareholders,” Whalen said. “Companies that view PTO in this way will lead in the war for top talent.”
Key Findings Regarding Paid Parental Leave*
- The United States is making inroads in expanding paid parental leave policies. More than half of organizations offer paid parental leave programs separate from short-term disability.
- Family planning need not be influenced by employment tenure. 65% of employers allow parental leave for employees who have been employed under one year.
- Paid parental leave is being used as a recruiting tool to entice potential employees. Three in five organizations tout paid parental-leave programs to attract new employees.
- Part-time employees are increasingly eligible for parental benefits traditionally reserved for full-time employees. For example, in 2019, 57% of new-parent part-time employees are eligible for job-protected leave, as compared to 47% in 2016.
- Employees typically receive their full salary during parental leave. Pay during parental leave is most often full salary (78%), a mix of full salary and partial salary (16%) or partial salary (6%).
“The rise in parental leave programs may be a result of state-led mandates, in addition to employers striving for differentiated benefits in a strained labor market — or possibly both,” Cawood said. “These programs have quickly become an important and expected part of the total rewards equation and are critical in maintaining an engaged and productive workforce.”
*Definition of paid parental leave: Paid leave for use by new parent employees to recover from the birth of a child and/or to care for or bond with a new child. Definition of “new-parent employee” (i.e., birth mother, father, domestic partner, adoptive parent, etc.) and qualifying circumstances (i.e., birth, adoption, foster placement, surrogacy birth, etc.) may vary and will be covered in this survey. This paid parental leave is distinct from other paid leave programs. While using this type of paid leave, a new-parent employee does not need to use or exhaust other paid-time-off earnings or accruals such as vacation, sick time or personal leave or PTO; however, an employee may be able to use other earned/accrued paid time off after the paid parental leave benefit is exhausted, if organizational policy allows.
About the Author
Brett Christie is a staff writer at WorldatWork.