What's new and differentiating for organizations to retain your most valued and highly skilled employees? How can organizations more broadly support all employees, especially on the heels of COVID-19 with an existing benefit?
IMPROVE EMPLOYEE MORALE AND REDUCE BALANCE SHEET LIABILITY
Our own Josh Reinhard sat down with Michael LoVasco, EVP at LoVasco Consulting Group, a leading benefits advisory firm based in Detroit, MI. Watch as they discuss how employers can get more out their existing PTO benefit.
PTO Exchange is a benefits platform that turns unused paid time off (PTO) hours into retirement accounts, student loan payments, donations, leave-sharing, charitable causes and more.
PTO Exchange gives companies an enticing benefit that uniquely serves every employee in the organization. And it all works within the system you have in place today.
Employers can really differentiate in the marketplace for talent with PTO Exchange. Reinforcing employee-friendliness and reputational excellence improves talent recruiting and retention. Further, most employers are carrying larger-than-normal PTO balances as liabilities that need to be mitigated and reduced. In simple terms, it pays off for both HR and Finance. Both will appreciate the returns for enhancing PTO benefits and reducing corporate liability.
ABOUT LOVASCO CONSULTING
Headquartered in Detroit, MI, LoVasco is an independent, privately-held consulting firm specializing in developing innovative solutions to help employers meet today's benefit challenges. LoVasco advises organizations on their employee benefits, retirement benefits and executive benefit strategies and programs.
Michael LoVasco: All right, welcome everyone. Thank you for joining us today. I just want to take a moment to introduce myself. My name's Mike LoVasco, hopefully you guys know who I am. If you've been following any of the content that we've been putting out, I lead the business development team at LoVasco and I also work closely with the benefits consulting team. At LoVasco, we have three teams, benefits consulting, retirement plan consulting, and executive benefits. Most of our clients, they range in size anywhere from maybe a hundred, to a couple thousand employees, and we're helping them with any of those three practice areas.
Now, over the last 17 months, we've been publishing a lot of content, typically through email, on a variety of interesting topics. We're trying to change it up a little bit, so we're trying this video blog today, and I'm excited to be joined by our first guest, Josh Reinhard of PTO Exchange. Josh, let's just take a minute. Can you tell our audience a little bit about yourself and PTO Exchange?
Josh Reinhard: Sure, thanks Mike. Happy to be here. My name's Josh Reinhard, I'm the vice president of sales with PTO exchange. And what PCO exchange is, we're a platform that allows employees to self-direct the value of their earned, but unused paid time off for different purposes, so it provides choice and flexibility for employees. The idea behind it is as we move into this hybrid workforce that a lot of companies are transitioning into, we really are providing hybrid benefits for the hybrid workforce.
Michael LoVasco: Okay, yeah this whole concept of PTO Exchange struck a chord with us at the end of last year, when we looked at our PTO balances and saw that the vast majority of our team did not use their PTO for one reason or another. Most of that was because we're stuck at home and so what do we do with the value of that PTO? That's how this conversation started. So tell us a little bit more about how the platform got off the ground and what you guys are up to.
Josh Reinhard: Yeah, I mean that trend that you're talking about is something that we saw across a lot of clients across all industries and clients sizes last year, PTO requests on average, we're down 35% from 2019 to 2020. So a lot of companies are sitting on excess balances of PTO that employees have that they carried from one year to the next. While things are getting better here in 2021, I think we're going to see somewhat of the same as we move through this year and into 2022. So paired with that, one of the trends that we saw was that finance folks were increasingly concerned about the liability that was being carried as it relates to those PTO balances.
The thing that's interesting about this is it's not unique to the pandemic. People in the US just don't use paid time off the way that they should. On average, an employee earns three weeks of paid time off, they use two. They earn four weeks of paid time off, they use three. On average employees leave one week of paid time off on the books and that equates to $155 billion worth of unused paid time off every year.
Michael LoVasco: A lot of money!
Josh Reinhard: Lot of money. Last year, again, with those PTO requests down, that was north of $200 billion. So being able to take some of that, which is now a liability that's sitting on the balance sheets of these companies, CFOs and controllers are loving a solution like PTO Exchange, because yes, it's a great benefit for the employees, absolutely, but for them, it's also a reduction in liability. So it's one of those unique times where finance and HR are both on the same page about a really great benefit.
Chris Marren: Yeah, and I think it's an issue or a challenge, that, I mean, regardless of which demographic or age cohorts you're looking at in the workforce, it's something that's an issue for everybody. So I think it's got a broad appeal, I guess, is what I'm trying to say to employees, regardless of the demographics and age and experience in the workforce.
Josh Reinhard: Yes, that's right.
It's an interesting point that you bring up, because that's one of the things that we're really proud of at PTO Exchange, is that our solution is designed so that everybody can get value of it regardless of their age or their circumstance in life, kind of where they sit. A lot of companies that I talk to initially reach out to PTO Exchange, and they're interested in specifically our student loan debt part of our platform. They have employees that are dealing with student loan issues and how are they going to solve for this, and I think it's a noble cause for an HR and total rewards department to take on.
But when you're looking at a solution like that, it does only speak to maybe 25% of your employee population. Whereas with a solution like ours, for Millennials or Gen Zs who are struggling with student debt, they can certainly use some of their excess time to help pay down those loans. But for Baby Boomers who are maybe considering leaving the workforce, they can maximize their 401(k) or their HSA before they retire. For Generation X-ers who now have started a family, they can use some of their excess time to offset the cost of a trip that they're going to go on by using it for travel plans.
For employees that have nonprofits that they want to support, but they don't have the disposable income to write the check for that nonprofit that they'd like to, they can take a couple hours of time and make a donation to that nonprofit. So there's really a lot of milestones that employees hit over their course of their career, and part of the beauty of PTO Exchange is that we have solutions that hit each of those milestones so everyone can get value from it.
Michael LoVasco: Right, okay. So I understand the business reasons why PTO Exchange might be an important ... but take me out of the C-suite. I'm an employee, why would PTO Exchange matter to me? How do I use the platform to get value out of it?
Josh Reinhard: Yeah, absolutely. So again, it's about choice and flexibility for the employee. So if you have accrued, but unused vacation hours, you can then convert them into a number of different plans that we offer. We offer financial wellness plans, we offer social wellbeing plans and we offer something basically akin to a marketplace. Within the financial wellness plans, employees can take a couple hours of their paid time off and convert them to 401(k) contributions on a pretax basis. They can use them to help fund their HSA. They can use them to pay down their student loan, or if they're currently enrolled in classes for tuition payment, or they can cash it out. Those are the options they have in the financial wellness side.
On the social wellbeing side, there are options to take your paid time off and convert that to donations to nonprofits. So our platform integrates with the IRS's database of 501(c)(3)s, employees search for the nonprofit they want to support, take a couple of hours and make a donation. They can share time with a coworker. If you have a coworker that's in need, that's exhausted all of their paid time off.
Then on the marketplace side, we have a partnership with Priceline and employees can use some of their excess time to offset the cost of some of their travel-related expenses. So maybe they earn four or five weeks of paid time off, but only go on vacation for a week or two, they can use some of that excess time to reduce the cost of travel-related expenses or hotels, things like that.
Michael LoVasco: Yeah, okay. So I mean, flexibility, you said that a moment ago, it really does sound like whether it's putting money back into the 401(k), spending on vacation, which frankly sounds like a great thing to do, everyone's itching to get out. Then also, from a social standpoint, contributing to those in need, which is awesome. So, we've hit the highlights of PTO Exchange, where are you guys going in the future? What's next? What are you working on?
Josh Reinhard: Yeah, so we have a few additional plans on our roadmap. We're getting the feedback from our clients and prospects that we've talked to about what they'd like to see. Some of the new products that we'll be offering, we're going to be offering 529 plans as well. So that will be another option in the financial wellness category, as well as emergency savings. So not just cashing out paid time off to help pay for unexpected expenses, but building good financial behavior through a savings account where employees might not be doing that today.
We're also going to be offering options for employees to convert paid time off, to pay for voluntary benefits. So if you don't feel like you're getting the participation in some of the voluntary benefits, you can use an hour or two to cover the premium of that benefit. We're also looking at partners and options for family planning. So oftentimes you see that things like infertility care is covered by medical plans, but fertility care is not, and it's wildly expensive and difficult to navigate. So we're going to be partnering with a firm that's going to help redirect the value of paid time off to help cover those costs. So those are the sorts of things that we're looking at down the future
Michael LoVasco: That's awesome, that's really great. We're getting to the end of our time. So we'll move to conclude. Where can people find you Josh, if they want more information?
Josh Reinhard: Yeah, you can find us at ptoexchange.com, there's a ton of information there and white papers and case studies that we've put together for companies that are facing a dilemma of what to do about excess PTO. You can always reach out to me, my email is email@example.com, I'm happy to answer any questions that anyone may have.
Michael LoVasco: OK, great.
Josh Reinhard: Of course they can always reach out to you too, Mike. We love the partnership that we have with LoVasco, so if you have any interest in reaching out to Mike, he can set up some time where the three of us can chat and we can go into more detail about what PTO Exchange has to offer.
Michael LoVasco: Okay. Any last asks of our audience? Things that you would love to see them do, or hear to interact with you?
Josh Reinhard: Yeah. Our biggest ask right now is really along the lines of that last part here on what's on our roadmap. We are always open to feedback from companies of what they'd like to see. If there's additional financial wellness plans, or social wellbeing plans, or even something outside of the ordinary that we're not thinking about, that we can add to our platform that would provide value for your employees in ways that they can convert their paid time off, we are very open to suggestions. So email me, reach out to me. I'm happy to chat with you about what we can do.
Michael LoVasco: Cool, great. Thank you for the time today, Josh. Hopefully this is the first of many video blogs that we'll be doing to share more information about innovative people like Josh and PTO Exchange with a broader audience and get the word out. So, thank you everyone today for watching. It's Friday here in Detroit, so enjoy your weekend.
Josh Reinhard: Thank you, Michael.
Build Your Company's "Reputational Excellence" with PTO Exchange
Companies are facing a dilemma about how to address employees' reluctance to take time off.
The demand for talent means many companies will not be able to fill and retain skilled positions as the economy rebounds after COVID. PTO Exchange creates a highly differentiated benefit to retain key talent and enhance financial security, while allowing companies to reduce a ballooning PTO liability.
This is a notable time with many companies making bold adjustments to their PTO strategy and trying to find new ways to help their employee community bridge the changes that are affecting their lives.
If PTO donations, leave-sharing, cash-out or one of our other service plans are something that can help your organization navigate through this situation, we are here to help.
Learn more about the PTO Time Bomb and what your organization can do to get ahead of this freight train of surplus PTO.