Organizational Wellness

Seven Key Benefits of PTO for Employers

Aug 24, 2023
Last Updated Sep 19, 2023

Attracting and retaining top talent continues to be competitive in this tight labor market. One of the ways companies can build their reputation as an employer of choice is by offering competitive benefits packages, including paid time off (PTO). Your PTO can play a major role in how potential employees view your organization, the vast majority of employees consider their wellbeing as important as their salary.

But employees are not the only ones who benefit from getting paid to kick back: Employers can benefit from PTO policies as well, as it can help to reduce absenteeism, boost employee morale and satisfaction, and attract new talent that values flexible work arrangements. 

As one in four American workers don't get any paid vacation days or holidays, according to the Center for Economic and Policy Research, many employers are missing out on these benefits. Here’s what organizations stand to gain with a robust PTO policy.

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Benefits of a Good PTO Policy

Some of the benefits of PTO are pretty obvious; employees especially want the perks of the time off. However, PTO can positively impact both the employees and the company, particularly when it comes to getting results. Here are the benefits of a good PTO policy and how your business will profit.

  1. Work-Life Wellness

Sometimes, HR management and employers assume that the only real impact they have on their employees is when those employees are actively working. However, the policies you set as a company affect the personal lives of your employees, too. That’s why prioritizing work-life wellness is so key, and PTO can play a big part in that.

If employees only think about their job around the clock and never get enough rest or time off, they don’t have a healthy work life or a healthy home life. HR benefits like PTO can flip the script here by not only offering PTO but encouraging their employees to take and enjoy their time off to work on themselves, practice self-care, and focus on their personal relationships. Companies that say they care about their employees’ wellness need to actually reflect that care in their policies, and giving people the time they need to manage their personal lives with PTO will directly contribute to better work-life wellness.

  1. Support Inclusion and Diversity

No two people are living the same lives, which means greater flexibility and understanding when it comes to personal responsibilities actually promote inclusion and diversity in your workplace. People celebrate different holidays, have different demands in their family life, and have different health concerns that may require time off outside of your typical calendar-based time off.

So, if you’re wondering how to build inclusion and wellbeing in the workplace, start with PTO! Show your employees that you see them as individuals and appreciate their contributions no matter their lifestyle or cultural background.

  1. Employee Satisfaction & Autonomy

Employees who are allowed to take ownership of their own time get to exercise their autonomy and govern themselves. PTO gives them the freedom to make decisions for themselves without reporting specific reasons to a manager, which builds trust and adds more satisfaction to the day-to-day operations of their job. 

If someone has a particularly demanding week, they could choose to use some PTO at the end of the week and take Friday off for their mental health. This creates a much more positive employee experience and makes your company a great place to work.

  1. Improved Results & Productivity

Employees who aren’t getting adequate rest, don’t have time to take breaks or vacations, or who don’t feel trusted to do their job aren’t going to engage with their company or care all that much. On the flip side, engaged employees are more productive and do better work. By offering PTO, employees can disengage from work when they need to so that they are always present for their work otherwise.

  1. Transparency and Respect

Having an official PTO policy reduces the urge in employees to lie about the time they take off. Instead of facing a cough once they’re back in the office, employees can use sick days for sick days and other PTO days for whatever they want. This level of transparency is great for employee relations and certainly creates more cohesiveness among teams and supervisors.

This kind of trust can have a measurable impact on business operations: Employees in high-trust work environments are76% more engaged than those in low-trust environments. If you hire trustworthy employees, then actually trust them with their time management and job performance. More often than not, you’ll see more engaged employees who are more productive and contribute to your business far more. When employees get that mutual respect for their time and effort, they have no reason to skirt the rules or misuse their time.

  1. Reduced Absenteeism

One of the biggest indicators of unengaged employees is absenteeism, but employees who have PTO don’t need to necessarily take unmandated time off since they know they have that freedom. If an employee is experiencing some burnout, they can confidently take a mental health day using their PTO, guilt-free. This means less micromanagement, better engagement, and loyal employees who are less likely to quit (which we’ll get into next!)

  1. Attract + Retain Talent

One of the biggest HR responsibilities is bringing on the right people and offering all the company can to keep those employees with great benefits and a satisfying work life. You aren’t going to bring in the same level of talent if you don’t include PTO as a benefit. This is so true that one study found that 63% of employees said they’d turn down a job offer if it didn’t include PTO.

Plus, employee retention can be quite the challenge in the modern workforce where people are no longer settling for less; people need their needs met and are willing to elsewhere if a competitor can offer better benefits. PTO is an easy way to provide a flexible work environment, reward great work, and ultimately boost retention.

Creating Wellness In and Out of Work

Offering PTO is the first step in supporting employee wellness, a non-negotiable aspect of modern talent retention.

You can actively foster workplace wellness with a wellness program. This not only helps your employees thrive, but it can benefit your bottom line: Three out of four of HR leaders report their wellness program reduces the cost of providing healthcare benefits. And in a study of more than 19,000 employees, Wellhub clients saw their healthcare costs reduce by up to 35%. These are significant savings, especially as the cost of providing healthcare to employees in the U.S. is anticipated to rise more than 6% year over year.

Speak with a Wellhub wellbeing specialist today to discuss how we can help you save with wellness.

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Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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