Stop the PTO Pileup: How to Get Employees to Actually Take Vacation

Too many employees leave their vacation days untouched, piling up unused PTO that could prevent burnout and boost retention. Your PTO policy shouldn’t just be words on paper – it needs to work as a real benefit that employees want to use. Ready to turn PTO into a retention tool your team actually uses?

Creating a PTO-Friendly Culture

It’s not good HR policy to have too many unused PTO days built up, and it’s not good for your employees’ mental health, either. Here are some ideas for chipping away at the backlog and encouraging employees to get away and stave off burnout.

Cap the number of days an employee can take at a time

This strategy can encourage employees to take time off in manageable stretches throughout the year and keep your teams functioning with sufficient staff. Employees can still take their time off, but those days will be appropriately portioned out. If you have a lot of employees with too much PTO, you may want to combine this strategy with the one below.

Let employees roll some days over into the next year

If you don’t already allow some PTO rollover (you may be legally required to do so, depending on where you operate), this may be the year. Decide how much PTO you’ll allow for rollover and make sure to communicate the new policy clearly to employees.

Offer to cash out a few PTO days

Many individuals and families struggle to make ends meet amid ongoing economic uncertainty. At least some of these folks would probably prefer a cashout to time off.

Host a “cashout” campaign for a month. Offer to cash out a limited number of PTO days to encourage employees with lots of PTO to either take time off or cash out PTO during an upcoming pay period.

Tip: To avoid having to pay out an entire year’s worth of PTO at once, consider combining the three strategies above. You could allow employees to cash out a limited amount of PTO days, roll over some and take the rest as actual vacation time.

Send personalized reminders with the number of PTO days accrued

Send out an email or a text notification so employees can see exactly how much PTO they have accrued and what their options are if they choose not to take their PTO days as time off. Remind them that if they wait too long to take their time off, some requests may be denied.

Promote shorter breaks

Promote shorter breaks, such as mental health days, long weekends and mid-week breaks. This strategy provides a chance to disconnect and come back refreshed.

Establish a PTO donation program

While some of your employees may have plentiful PTO, others may have had to use theirs to care for themselves or ill family members. Consider creating a PTO bank for employees with lots of PTO to donate to those without.

Keep in mind that the person receiving the donated PTO will need to pay income tax on those PTO wages. Make sure employees understand the tax implications before borrowing PTO time.

Offer to exchange PTO for other benefits

Give employees the option to use their PTO in other ways, such as for an additional 401(k) contribution (if they’re not maxed out for the year), a donation to a charity or a tuition reimbursement for an online course.

You may need to set time limits on these benefits to incentivize your employees to take advantage of these programs before end of year. For example, you can make the next month a “Give Back” month and invite employees to donate a PTO day or two to their favorite nonprofit.

For the long run, consider an unlimited PTO policy

A potential long-term solution is to convert your policy to unlimited PTO. Unlimited PTO policies have been gaining ground in recent years. Not having a set amount of PTO days to spend can eliminate the pressure on employees to “get their PTO in” before the end of the year. But employees still may need a reminder to take time off and recharge.

Unlimited PTO policies require careful planning, especially when you’re dealing with employees who have banks of earned vacation time, so you should talk to legal counsel before moving forward.

A combination approach may work best

In most cases, you’ll likely need to use a combination of some or all of these strategies to get control of PTO accruals.

Whichever strategies you choose, focus on establishing cohesive policies that are communicated clearly and enforced consistently. Consult with counsel (especially if you’re considering a policy change) to avoid running afoul of state and federal law, and give us a call for more ideas on managing your PTO program wisely.