Ever since the pandemic, employees have been demanding more Paid Time Off (PTO) and other forms of leave. And that's understandable--most of us realized during the crisis that we all need to spend more time with our families and enjoy life outside of work.
The renewed focus on the work-life balance has changed the world of HR. Recruiting is harder now if you don't have a flexible leave management policy, as 61% of candidates say that this is a crucial factor when choosing an employer. It also affects retention, as the work-life balance was one of the driving forces behind last year's Great Resignation.
So, how much leave should you offer? What types of leave do employees expect? And how can leave management help you attract, engage and retain talented people?
The experts at NFP recently conducted a massive benchmarking study on the current state of leave management. You can access the full report here, but here are a few important highlights:
1. PTO is the most common approach to leave management
Many employers still offer a vacation days allowance, with separate allowances for paid sick leave and personal days.
However, the majority of employers now provide a single Paid Time Off (PTO) allowance, which is a single bucket of time that employees can use according to their needs. According to NFP's research:
- 53% of employers offer PTO only
- 36% of employers provide vacation plans
- 9% use a mix of PTO and vacation plans
While PTO is the most common approach—and therefore the most familiar to potential candidates—plenty of employers are sticking with traditional vacation plans for now. Check in with your team to see if your current Total Rewards strategy suits their needs.
2. New employees can earn paid leave from day one
The majority of employers will grant a paid leave allowance to employees from the moment they join. The actual figures vary slightly depending on whether the leave management approach is PTO or a vacation plan.
NFP's survey has some interesting data about when new hires can start earning PTO or vacation days:
- From the date of hire: 64% of new hires in PTO systems; 53% in a vacation plan
- 30-day minimum: 7% must wait this long to earn PTO, while 11% have to wait for vacation days
- 90-day minimum: A three-month wait applies in 20% of PTO-based systems, and 25% of vacation plans
In both cases, allowances are usually capped for new employees. The standard amount is:
- PTO: 52% of new hires are entitled to 15 PTO days or more
- Vacation days: 54% of new hires can earn up to 10 vacation days
3. Paid sick leave is a regulatory challenge
Paid sick leave is still a hot political topic, even as the pandemic fades into history. Many states and municipalities have enacted legislation on this topic, including laws in Maryland and D.C.
Each piece of legislation has its own rules on accrual and reporting, which makes life difficult for multistate employers. As of 2023, NFP finds that this is how employers are facing the challenge:
- 62% of employers offer comparable accrual to ensure compliance
- 28% of employers follow the local accrual rules in each locale
- 9% do not offer sick leave as a separate benefit
Statutory leave is always the trickiest part of leave management. It's harder still when laws keep changing. To stay compliant, make sure you track all illness-related absences for each employee and audit your records regularly. If you need more advice on HR compliance, talk an expert at Helios HR.
4. Employers might be losing money on maternity leave
Parental leave continues to evolve, with 45% of employers now offering maternity leave and 49% providing parental leave.
There is still no federal policy on maternity leave, but that doesn't mean that employees can't claim benefits. Short-Term Disability support and Family Medical Leave Allowance (FMLA) can both help cover the cost of taking time off for childbirth and family care.
According to NLP's findings:
- 94% run FMLA and maternity leave concurrently
- 58% co-ordinate maternity leave and short-term disability
- 37% co-ordinate maternity leave with state-provided medical leave benefits
- 37% run maternity leave and state leave concurrently
If you're not coordinating these benefits, both you and the employee could miss out on additional assistance. Understanding the rules on a local, state, and federal level can help provide the best possible support when employees need it most.
5. Family caregiver leave is rising
Recently, we've seen the emergence of "The Sandwich Generation"—people in their 40s and 50s who are simultaneously supporting children and their aging parents.
It's one of those demographic shifts that impacts HR strategy, including leave management policy. More people find themselves responsible for dependent relatives, while others require time to see a family member on military leave.
The number of employers offering family caregiver leave has increased by 26% in the past two years, according to research by NFP. The amount of available leave is:
- 57% offer under six weeks leave with full pay
- 37% provide six to twelve weeks
- 6% give employees more than twelve weeks
Family caregiver leave is important to many people, but not common to all employers. If you're trying to stand out in the recruitment market, this could be a useful differentiator.
Need help with your leave management strategy?
Leave management is a central plank of your Total Rewards strategy, which means that it's the key to attracting, engaging, and retaining great talent.
Getting leave management right requires expert HR knowledge. Book a call with Helios HR today and let's talk about making your team happy.
