Insight on how real small businesses handle PTO
While enterprise businesses are creating “astronomical salary” offers that are hard to turn down, small businesses may have lucked into an unsuspecting strategic recruiting advantage. Specifically, they are more flexible to workers’ wants and needs. We’ll show you 5 PTO policy examples for small business owners.
The State of PTO report (a study of more than 600 small business employees) reveals what employees really want when they get a job (apart from the job itself): the promise of vacation and sick time.
Participants in the study ranked a PTO policy as more important than dental insurance, vision insurance, or employer-sponsored 401(k) plans.
This insight could spell good news for smaller companies. They often don’t have endless budgets to negotiate higher salaries. But they can be more creative in developing company perks and culture, including vacation time, keeping them competitive with their larger counterparts.
Take Grounds for Promotion, for instance.
They’re a media company based in Boulder, Colorado. They offer staff a “take what you need” unlimited PTO policy in which employees are encouraged to take PTO whenever they need it. Workers may even work from another country.
Not only does this kind of paid leave option attracts job seekers, but it also fosters employee retention with existing staff, too.
Big companies can offer huge salaries, but smaller companies can offer more PTO days within less rigid policies. Both of which workers could find attractive.
“I don’t care if people sit in their backyard with their kids and do nothing, they need the headspace. You don’t have to go to Hawaii.” — Tony Wibbeler, Bolder Industries
The problem is small businesses are busy. Between setting up infrastructure, hiring employees, and navigating the labyrinth of business compliance steps, when do founders have time to consider PTO, formalize an actual policy, and turn it into a strategic differentiator for recruiting?
This article showcases PTO policy examples for small business leaders to share and inspire new policies that put time-strapped small and midsize business owners on the fast track to benefits that pay back.
5 PTO policy examples for small business owners
Company: a recycling services and waste management company that diverts solid waste from traditional disposal methods (landfills), repurposing the materials into valuable, sustainable products
Number of Employees with PTO: 30
PTO Policy: Full-time employees get 10 days off with 5 holidays, and part-time employees get pro-rata PTO based on the hours they work. After 3 years, our full-time employees get 17 days off.
Headquarters: Boulder, Colorado
“PTO is very important to me,” says Tony Wibbeler, who grew up in Northern Indiana with a commercial backdrop of big auto companies and factories. He watched as family farming and industrial jobs disappeared over time, and opportunity for “non-college educated workers who want to bring home enough money to own a house, have a family and maybe a nice pick-up truck” dwindled.
“That’s what I wanted to create,” Tony says.
Tony’s tire recycling company breaks down tire compounds into reusable raw materials.
He’s built a PTO policy that recognizes and values the people behind the work and a culture that enforces the police.
“We offer PTO to everyone….and PTO is also mandatory. We enforce it in our culture by saying things like, ‘Hey, your PTO is running out what are you going to do with it?’”
Tony says what often happens in blue-collar work is that people use their PTO for things that don’t bring them enjoyment. “I want people to come to work and feel like they have security, where they don’t have to worry about issues in their life and worry about losing their jobs if their kids are sick or someone dies,” Tony says.
And the benefit?
“Our PTO policy pays us back 10 times over. Most factory workers clock out for the day and don’t care if shit hits the fan. Our workers stay to solve the problem. People who leave the company give us 4 weeks notice, or ensure their role is filled. They talk about how cool it is to work here. That’s value.
Company: One of the nation’s fastest-growing hair care companies, with products in 2,500 stores worldwide
Number of Employees with PTO: 9
PTO Policy: Take what you need, within reason, and paid time off for birthdays
Headquarters: Detroit, Michigan
At Naturalicious, no one expects you to work on your birthday. That’s your day. And that’s just one of several non-routine perks Gwen Jimmere offers to her staff. She invests in sustainable programs that increase the sense of appreciation for employees’ time and subsequently decrease employee turnover.
“I remember working at my [corporate] job and feeling so annoyed that I had to request the day off when I was sick and then having to prove it with a doctor’s note. I’m a grown woman, I don’t want to be treated like a kid,” Gwen said.
Gwen believes the greatest human need is to feel appreciated and that you get much better work out of people when they feel appreciated and respected.
“You can’t feel appreciated and respected when you’re limited to a finite number of days of paid time off and are treated as if your well-being and family matter less than your job,” she says. Moreover, when people feel underappreciated they leave the company.
“Turnover is expensive, and it sucks. You have to hire people, train them, get them up to speed, and then God forbid it doesn’t work out. Then you have to hire someone all over again and repeat this expensive cycle.”
“It’s in the business owner’s best interest to train well, hire well, and foster an environment where people want to stay to create the lowest turnover possible.”
Sugared + Bronzed
Company: a hair removal and spray tanning salon with 10 locations nationwide, including California, New York, and Pennsylvania
Number of Employees with PTO: 12
PTO Policy: 10 days
Headquarters: Santa Monica, California
Courtney Claghorn, the owner of Sugared + Bronzed hair removal and spray tanning salon, wants to provide benefits and career value to her full-time salon employees, an uncommon benefit in cosmetologist roles. “My personal thinking is that full-time staff deserve paid time off. You’re expected to be there five days a week,” Courtney said in an interview with Zenefits. By providing paid vacation and investing in her employee’s career paths, she hopes to differentiate her business as an employer cosmetologists want to work for.
Urban Energy Group
Company: An energy service company that modernizes warehouse lighting systems in Washington, Oregon, Idaho, and Montana.
Number of Employees with PTO: 4
PTO Policy: 9 weeks paid vacation, use it or lose it
Headquarters: Seattle, Washington
Employee culture at Urban Energy Group focuses on achievements both inside and outside of the company. Founded by mountaineers who often need several weeks of continuous paid vacation days to accomplish remote mountain objectives, the company formalized their “9 weeks of recognized vacation per year” as a policy a few years after the company organized.
Employees can take fully restorative mini-sabbaticals, knowing that they have a job to return to and coworkers who will listen to stories of travel and adventure. To afford the program, employees agree to less than standard base salary rates for competitively similar jobs in the region.
Grounds for Promotion
Company: a digital marketing agency that specializes in digital paid advertising
Number of Employees with PTO: 3
PTO Policy: Take as much as you need
Headquarters: Boulder, Colorado
Before Jonathan Sackheim owned his own media company, he worked in bigger agencies with strict PTO request policies and enforcement. But a 2-week vacation left Jonathan wanting more, and resentment began building toward the employer.
“I always wanted to go on more vacation than two weeks allow and to be able to attend the occasional wedding, funeral, or family event,” Jonathan remembers. “It’s nice not to have to live your life in just two weeks.” His policy now? Unlimited vacation time, and get your work done.
Tips for Better PTO Policies
Building a paid time off policy that makes sense for your business isn’t always about remaining competitive. While a robust vacation time and sick leave package can boost recruiting and retention efforts, PTO should be compliant.
And for the best results, your employees actually need to feel comfortable enough to put in an unlimited PTO request.
To ensure your employees use their unlimited PTO hours and paid sick leave appropriately and you cover your compliance requirements, check out these fast and actionable tips:
- Your most up-to-date paid time off policy should be included in your employee handbook.
- Ensure your policy is current with federal and state-specific paid leave laws.
- If using an unlimited PTO policy, mandate that employees should take a certain amount of paid vacation days every year.
- If using a traditional PTO policy, be clear about what events count for both vacation and sick time off.
- Use an online platform for simple unlimited PTO request processing and paid leave scheduling.
- Define your process for handling unused PTO days.
- For businesses sticking to traditional PTO, ensure employees track their time for accurate accrued PTO hours.
- If offering unpaid leave, make a clear distinction of when employees should use unpaid time off and paid leave.
- Remind employees of your vacation policy at least once a year.
- Get feedback from workers about their experience with PTO hours — was making a PTO request easy, did they take enough time off?
- Avoid forcing your employees to prove they were ill when they request sick leave.
*These companies and their PTO policies were published in Summer 2018 in the State of PTO Report, their policies are subject to change and may not represent their current policies.
This article is intended only for informational purposes. It is not a substitute for legal consultation. While we attempt to keep the information covered timely and accurate, laws and regulations are subject to change.
This article has been updated.