Paid Vacation/PTO Offerings—Time to Check Those Balances!

Justin Held, CEBSJanuary 24, 2023March 10, 2023

The calendar flipped from December to January, setting off the annual rush of workers checking their updated time-off balances. Dreary January days (like those in Wisconsin today) give workers the opportunity to start brainstorming uses for that time off. Is this the year you chase some sunshine? Should you take a summer road trip to a National Park? Does a hectic year make the idea of a staycation sound enticing?

Organizations are also continually evaluating their paid-time-off (PTO) offerings, analyzing how they are sizing up to their competition in a tight labor market. The recent 2022 Employee Benefits Survey explored the prevalence of these programs, delving into common offerings for workers of different service levels as well as various options such as carryover and buy/sell options.

About one-half (48%) of responding organizations offer a separate paid vacation plan, while 42% offer a PTO bank that combines vacation and sick leave. In addition, 8% offer unlimited vacation time. These offerings are explored more thoroughly below.

Vacation Day Offerings

The large majority (93%) of organizations that offer a separate paid vacation plan vary the number of offered days by year of service. Those respondents were asked how many days were offered for various levels of service.
At the day of hire, responding organizations were most likely to offer ten vacation days (31%), followed by no days (19%) and 15 days (18%).
At one year of service, respondents were also most likely to offer ten vacation days (40%), followed by 15 days (25%) and 11-14 days (13%).
The most common vacation offering for workers with five years of service is 15 days (50%). Twenty days (17%) is also a common offering.
At ten years of service, 40% of respondents offer 20 days of vacation, followed by 15 days (20%) and 25 days (13%).
Finally, at 20 years of service, respondents most commonly offer 20 (35%) or 25 days (31%).

PTO Offerings

A similar portion (93%) of organizations that offer a PTO bank vary the number of offered days by years of service. Again, those respondents were asked about their offering levels based on various levels of service.
At the day of hire, respondents that offer a PTO bank are the most likely to offer no days (21%), followed by 15 days (18%) and 16-19 days (13%).
At one year of service, responding organizations most commonly offer ten (19%) or 15 (19%) days. About one in seven (13%) offer 21 days or more at this service level.
At five years of service, organizations that offer PTO banks with service variance most commonly offer 21-24 days (27%), followed by 20 (20%) and 15 (15%) days.
The most common PTO bank offering level for workers with ten years of service is 20 days (23%), followed closely by 25 days (22%).
At 20 years of service, PTO offerings vary. Common offering levels include 25 days (20%), 26-29 days (19%), 20 days (17%) and 30 days (15%).

Vacation/PTO Offerings

In addition, the 2022 Employee Benefits Survey explored a number of PTO options commonly offered by employers.

About seven in ten (69%) organizations that offer PTO allow carryover of earned vacation/PTO to subsequent years.
A similar proportion (65%) offer payout of accrued vacation/PTO at separation of service
Less often (19%), responding organizations permit leave donation, which allows workers to donate time off to workers in need.
About one in nine (11%) responding organizations permit management to offer additional vacation/PTO days for midcareer hires. This offering can serve as an extremely valuable recruitment tool for filling key positions.
While rare, some responding organizations allow their workers to sell (10%) or even buy additional (6%) vacation/PTO days.