Under traditional paid-time-off (PTO) plans, the longer people stay with the company, the more vacation time they earn. But that may no longer be the best way to run these plans.
Reason: Only employees at the end stages of their careers can get the maximum amount of vacation time. And since research has shown employees only stay with a company for an average of 3.5 years, the majority of workers won’t ever reap the full benefits of this type of plan.
Plus, workers who are nearing retirement age and have accumulated large amounts of vacation time are the ones least likely to appreciate having such a large amount of time off available to them.
On the other hand, younger employees — who studies have shown greatly value a strong work/life balance — are more likely to appreciate extra time off.
So what can companies do to make their PTO policies more appealing to different age groups?
Incorporating more give and take
One option is allowing greater flexibility when it comes to PTO benefits.
Two strategies companies have had success with:
- Allow older workers to cash-in vacation time. If your older employees have more vacation time saved up than they ever plan on using, consider letting them transfer the cash equivalent of some of that time into their retirement plan accounts.
- Let younger workers buy extra time off. If employees use all their vacation time, consider giving them the option of purchasing extra time off. This perk is a proven way to boost job satisfaction and retention among younger workers — who, by the way, are the hardest to hold onto these days.
Based on a presentation by Gary B. Kushner at the 2010 SHRM conference in San Diego. Mr. Kushner is President and CEO of Kushner & Company, an HR strategy and employee benefits consulting and administration firm.
