Approximately 4 in 10 workers don't use all their PTO each year, which amounts to millions of days of unused PTO. The latest statistic is 768 million days (reported in 2019 and has likely significantly increased since). And these millions of unused accrued days also cost companies billions in PTO payouts, which is a liability on their balance sheets.
However, a solution that can benefit both employers and employees is convertible PTO.
What is convertible PTO?
Convertible PTO allows employees to exchange PTO for social well-being and financial wellness benefits. It enables employees to create custom benefits packages that meet their individual needs. Instead of letting unused PTO go to waste, it can go towards causes that are valuable to employees to benefit either themselves or their families. Additionally, with convertible benefits, employers no longer have to worry about a huge balance sheet liability from accrued PTO.
Employees can use convertible PTO in several ways:
- Making 401(k) contributions
- Donating to their favorite charities
- Booking their dream vacation
- Giving it to a co-worker in need
- Cash it out
So why would a company want to invest in giving employees the option to convert their PTO? We have seven ways it can benefit your company and your employees.
6 benefits of exchanging unused PTO
There are several benefits of implementing a convertible PTO program at your company:
- Attract and retain talent.
- Employee well-being
- Benefits program value
- Healthier workplace culture
- Employee satisfaction
- Commitment to diversity, equity, inclusion, and belonging (DEIB).
Let's dive into each one.
Attract and retain talent
With a tight labor market, the competition to get and keep good talent is at an all-time high. The average cost to replace an employee is twice their salary. At a time when companies can't afford to replace employers, they need any competitive advantage they can get to attract and retain the best candidates. While other companies can match a candidate on salary, they might not be able to on the benefits. Eighty-three percent of employees would be interested in converting their unused PTO to a financial resource, and 9 in 10 say this would encourage them to stay with their employer. Flexible benefits, such as convertible PTO, give employers an edge because it's a unique benefit they might not otherwise get elsewhere.
Show employees you care about their well-being
When employees feel like they're getting the support they need from their employers, they feel more engaged and productive, which translates to a better bottom line. Employers must show employees they care about their overall well-being, including financial, mental, physical, and social health. Convertible PTO allows employers to give employees the support they need in the ways they need it the most.
When employers show care, 87% of employees are engaged, 90% are productive, and 89% are loyal. On the other hand, when employees don't feel like their employers care, the figures drastically drop—engagement (45%), productivity (58%), and loyalty (54%).
Employees find value in their benefits
Companies waste so much money on benefits programs that their employees don't use. Because convertible PTO is customizable, you're giving employees the benefits they actually want. Employees can use the value of PTO in the areas of life they need more support, giving them options for their benefits so they don't feel locked into something they won't use. As a result, they find more value in your benefits program and are more likely to take advantage of them.
Facilitate a healthier workplace culture
When you don't show care for your employees' well-being, it can negatively impact your company culture. Other PTO policies, such as unlimited PTO, can lead to higher burnout rates and unhealthy work culture, as employers might still expect employees to work while on PTO. Flexible benefits demonstrate that you care about your employers' needs through benefits that emphasize work-life balance and well-being. Additionally, offering employees a leave-sharing program and an option for charitable donations through your convertible benefits program fosters a company culture of giving.
Employees feel more satisfied
If employers treat PTO like a currency with a value attached to it, employees are more likely to feel satisfied because they can use it in a way that benefits them. Convertible PTO helps employees see the value in their PTO because they can use it in tangible ways that improve their lives. With convertible PTO, employees can maximize their employers' benefits programs and find value in their benefits. Employees feel more engaged, productive, and creative because their needs are met.
Commitment to DEIB
Flexible benefits show an organization's commitment to diversity, equity, and inclusion and belonging (DEIB) as they cater to the individualized needs of diverse workforces.
According to Visier's Workplace Trends 2023 report, DEIB has the potential to increase sales revenue, expand market segments and customer bases, and ultimately increase profitability. DEIB is not only the right thing to do, it also makes good business sense
Convertible benefits create an equitable playing field for benefits. It doesn't discriminate like other PTO policies and is more inclusive. Convertible PTO isn't up to manager discretion and isn't subject to bias and negative perceptions compared to unlimited PTO. It's a scalable PTO program that meets the needs of an evolving workforce.
Convertible PTO benefits your entire workforce
A company's PTO policy shouldn't just benefit the company. Convertible PTO is a mutually beneficial solution providing value to employees and employers. If you're looking for the future of benefits, look no further than PTO Exchange's Benefits Platform. Contact us today for a demo.