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Determining Amount of Paid Time Off to Offer for Employees

I run a Medical Spa with 5 hourly paid employees. We are a retail business, and our current policy is:

Years 1 & 2 : 5 PTO Days
Years 3 & $: 10 PTO Days
Years 5 & more : 15 PTO Days

PTO only starts accruing after first 6 months with company.

What are your thoughts about this? Is this too little vacation to give for the first two years? I know this may be determined based on each business, but is there some sort of standard (i.e. reading some posts I'm getting the idea that 2 weeks is possible a standard).

Please help.

4 Responses

  • Mar 01, 2010

    Managing Principal

    There are no rules – but what you suggest is fairly common. PTO is only one element of your value proposition to employees – the answer to the question “Why work for you?”. Your Employee Handbook (a.k.a. Policy and Procedures Manual) lays out the hard elements of that proposition and keeps a lid on legal liabilities and disputes. The soft elements of your value proposition are your beliefs and values about what your business should be and do; and more importantly how you act on those beliefs and values – in this case your engagement with employees. Look at the whole picture and audit your record in attracting and retaining the people you need to deliver your business value proposition to clients – and see how your PTO policy looks in that context, because that;s the only context that matters.

  • Mar 01, 2010

    President

    It's a good idea to network with similar businesses in your area to get a sense of what's going on in your market. PTO is an important component to your retention strategy...especially with a younger work force. I found a link on salary.com that addresses your question and provides some statistics. It could be a good starting point for your "competitive analysis."

    http://www.salary.com/personal/layoutscripts/psnl_articles.asp?tab=psn&cat=cat011&ser=ser031&part=par088

    Congratulations on addressing this issue proactively before it becomes a retention issue!

  • Mar 02, 2010

    Julie Rains

    I agree that looking at employee attraction/retention and the competitive environment (which affects employee retention as many people will leave one company to go to another one that offers better pay, more time off, and better benefits) is essential to evaluating your PTO.

    But when you consider your PTO and compare to others, make sure you are looking at the entire picture. For example, do you allow employees to take time to attend kids' activities or go to doctor's and dentist's appointments without using PTO? Do you give paid time off for Federal holidays or pay overtime if your shop is open? Are your employees able to take long weekends off? Or, are you paying much more (or much less) than others? Looking at the entire environment can help in deciding if your package is attractive, and also help to promote the package to your employees.

  • Mar 09, 2010

    President

    Coming from both the small company and large company experiences, I looked back at my PTO experiences and how I felt about the whole process. These days, I think the build up of time is not so valid anymore. People don't stay as long, and companies may not keep people so long either. When I started, my aim was to provide a good environment for my employees that put them in a good position now, not later; which, I hope helps to keep them here. So, I go simply by a 90 day probation period after hire, and if they work out, they go straight to 10 day vacation and 10 day sick time (which they can use any way they want- kids sick, car sick, house sick, etc) per year. All earned per paycheck, of course. It takes all the headache out of it for me to simply provide one system, which is the best I can give up front. We do the typical holidays, but I do like the concept of giving 3 'floating' holidays (use whenever) as well, which helps bridge the issue of customs.

What do you think?

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