One challenge employers often face is when their employees are not taking their allotted paid time off (PTO). To counter this, some companies implement a forced PTO policy that requires employees to use all their PTO. Discover the advantages and disadvantages of forcing employees to take their PTO.
What is mandatory PTO?
A mandatory PTO policy is when employers require their employees to use at least some of their PTO each year. Companies that offer a regular PTO policy, where employees can take off a set amount of days each year, have a few options if their employees don’t use their PTO. They include having the days roll over into the next year, cashing out the days for compensation, or forfeiting the unused days entirely. By enforcing PTO, companies avoid these complicated options and give their employees more time to rejuvenate.
Companies can enforce mandatory PTO in a few ways. They can require each employee to take off a certain amount of time consecutively each year. This could be one week, five days off intermittently, or one day off per month. Businesses can also set deadlines for employees to use their PTO. This can be on a monthly, quarterly, seasonal, or annual basis.
[Read: Talent Recruiters' Insider Tips for Finding Talent in a Tough Hiring Market]
Working for a company that encourages taking PTO is a good way to boost employees' morale.
Advantages of implementing mandatory vacation time
- Save money on end-of-year PTO payouts. Letting employees cash out their PTO at the end of the year could lead to cash flow problems. By mandating PTO, cash-outs are entirely avoided, and companies save themselves from a financial headache.
- Encourage a healthy work-life balance. Requiring your employees to use their PTO shows that your organization values them as members of the team. It also shows that you empower your employees to have a healthy work-life balance. Setting the expectation that it is mandatory for employees to use their PTO signals to them that they aren’t expected to be online and working outside of the expected hours. Supporting employees’ lives outside of work takes the pressure off of them to always be working and encourages them to have a life for themselves.
- Help employees avoid burnout. When employees work for too long without a break at work, they tend to get burned out. Some employees may not even realize they are working so hard that they’re mentally and physically draining themselves until they’re completely exhausted. Requiring employees to take PTO helps ensure that they take some time to relax and reset at least once a year.
- Increase morale. Working for a company that encourages taking PTO is a good way to boost employees' morale. As stated above, having regular vacation time helps workers improve their mental and physical well-being. This positive attitude then has a ripple effect on their fellow employees, boosting their moods and increasing productivity.
[Read: How to Structure Employee Paid Time Off Policies]
Disadvantages of implementing mandatory vacation time
- Employees lose autonomy. Since the Great Resignation, an increasing number of people seeking employment are looking for more autonomy at work. Employees don’t want their employers telling them when they have to work and when they have to take off. When employees are forced to take time off, whether seasonally or annually, it disrupts their internal workflow. While they may appreciate the company valuing their time, being forced to take time off in the middle of a project or upcoming deadline can make work more difficult and stressful for them overall.
- Scheduling and work completion issues. Setting a seasonal deadline for PTO means employees who save all their PTO for the end of the season or forget to use it will all use it simultaneously. Having a handful of team members out at once creates scheduling and productivity issues internally. It may even force other employees to take on an increased workload. To avoid this complication, consider staggering each employee’s PTO deadline.
[Read: 7 Inexpensive Perks and Benefits to Offer Your Employees]
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Follow us on Instagram for more expert tips & business owners’ stories.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
