PTO Exchange enables employers to reduce their paid time off liability, convert it into a flexible financial tool, and provide unprecedented benefits flexibility, all while remaining cost-neutral. PTO Exchange created this category of benefits and continues to be the leader in this space since launching in 2013.
PTO Exchange is a platform that allows employees to exchange the value of unused PTO for goods, services, and benefits that matter to them. The program creates choice and flexibility for employees with an already accounted-for benefit while reducing balance sheet liability caused by excess PTO. Each option can be enabled/disabled for employees based on company preference:
- PTO Retirement: Make additional contributions to 401(k), 403(b), or 457 plans.
- PTO Education: Make student loan, tuition, or 529 plan payments.
- PTO Cash Out: Pay for unexpected expenses and reduce loans from retirement plans or predatory lenders.
- PTO Giving: Donate to non-profit/charity.
- PTO Travel: Purchase discounted hotels, car rentals, or airfare.
- PTO Healthcare: Make additional pre-tax contributions to health savings accounts (HSAs).
- PTO Sharing: Donate PTO to fellow employees needing extra time off.
Why are companies partnering with PTO Exchange?
There are many reasons employers are looking at a solution like PTO Exchange. Companies choose to partner with PTO Exchange for five main reasons:
Flexible solution to attract and retain talent
Our 2021 survey with Lighthouse Research & Advisory showed that 9 out of 10 employees agree that having the ability to exchange their PTO would make them more likely to stay with their employers. The same survey showed that 7 out of 10 employees say having a flexible leave benefit would make them feel like their company values and appreciates them.
In a competitive job market, organizations focus on retaining and acquiring talent. PTO Exchange allows companies to provide choice and flexibility with an already accounted-for benefit. This differentiates your benefits package when hiring new employees and ensures your employees know that the company values them once they're on board and have tenure.
From a retention perspective, most employees can only get value from their unused PTO when they leave their employer. Since most companies pay out PTO upon termination, you write an employee a check to leave the organization and work elsewhere. PTO Exchange allows employees to gain incremental access to the value of their excess PTO without walking out the door.
Develop financial wellness programs
Financial wellness is top of mind for both employers and employees. By implementing a financial wellness program, employers:
- Help employees flexibly allocate their financial benefits to fit their lifestyles
- Raise awareness of the organization's other financial benefit programs
- Take advantage of an already offered wellness benefit without increasing costs
- Differentiate themselves when hiring new talent
- Keep employees satisfied and productive by offering them benefits that reduce stress and increase their financial health
PTO Exchange allows employers to enhance their total rewards offering without introducing additional costs or benefits. Repurpose a portion of the excess PTO employees have and allow them to apply it towards things that will benefit them financially, such as paying down debt, retirement contributions, or saving for emergencies.
By offering various exchange options, you can accommodate the unique needs of a diverse workforce, promoting a culture of inclusion and equity. This can include addressing unique financial challenges employees face from different generations and socioeconomic backgrounds and creating a more inclusive and supportive work environment.
Allowing employees to make choices with their unused paid time off encourages financial wellness, reducing stress and improving overall well-being. It shows that employers are supporting their financial needs beyond just salary. Employees who feel financially secure and supported are more likely to engage positively in the workplace. Additionally, employers experience higher employee satisfaction, loyalty, and performance.
Cater to the needs of multigenerational, diverse workforces
More generations are in the workforce now than ever, and those different demographic groups have different needs. Organizations task HR and total rewards departments with finding a benefits solution that matters to the most significant number of employees without alienating any specific group.
This is where flexible benefits like convertible PTO come in. Convertible PTO makes it possible to offer customized benefits for employees that meet their needs while saving the company money on its benefits programs. What's more, flexible benefits can help you address the needs of all the generations in your workforce, especially as employees want to take more control over their benefits.
PTO Exchange is a solution where younger employees can use their excess PTO to pay down student loans, older employees can max out on their 401k/HSA contributions pre-tax before they leave the workforce, and those with children can leverage the discounted travel options or make 529 contributions.
Reduce balance sheet liability
Since the beginning of 2020, PTO requests have been down more than 34%. Some of that is due to the lingering effects of the COVID-19 pandemic, but remote and hybrid work has led to a backlog of accrued PTO on the books. Companies task finance departments with finding solutions to reduce PTO liabilities before year-over-year salary increases and promotions make PTO more expensive.
When PTO is carried from one year to the next, it presents multiple problems for finance teams. First, it's one of the larger line items on the balance sheet – often on par with benefit costs and hiring expenses. But it's also a liability that's growing over time. As employees carry PTO from one year to the next and receive merit increases, cost of living increases, or promotions – the value of that PTO increases along with their raises. If you have an employee who makes $50k/yr and carries their PTO in future years when they're making $60k/yr, that PTO got 20% more expensive by the time the company had to pay it out.
Create a positive culture and a culture of giving
One key focus of PTO Exchange is creating a positive culture of giving and community engagement. By allowing employees to donate their unused PTO to a charity or a colleague, employers can create a culture of giving within the workplace. This encourages employees to think about how they can positively impact their community and colleagues, which can generate support and teamwork within the workplace.
Creating a positive culture and a culture of giving is crucial for employers because it can increase employee satisfaction and retention. Employees who feel valued and engaged are likelier to stay with their employer and be productive. Furthermore, when companies demonstrate a commitment to corporate social responsibility and community engagement, they can enhance their reputation and attract top talent.
Additionally, promoting a culture of giving can help organizations build strong relationships with their local communities and create a sense of purpose for their employees. Fostering a positive culture and a culture of giving can positively impact employees and employers, leading to increased morale, productivity, and overall success.
Consider flexible benefits for your organization
PTO Exchange can help satisfy employees, increase productivity, and minimize turnover. What's more, it saves organizations money on their benefits. Allowing employees to exchange their unused paid time off for additional benefits can be a powerful way to reward performance and motivate employees to work harder. This can create a culture of excellence and inspire employees to do their best work.
Learn more about PTO Exchange and how you can use it to offer flexible benefits to your employees.