The Importance of PTO Planning

The holiday season is fast approaching and businesses everywhere are preparing for the impact of paid time off (PTO) on the availability of their workforces. While the end of the year highlights the toll PTO can have on business operations and profitability, companies are affected by holidays, vacation, and sick days all year round.

When a company is not prepared for employee PTO, whether in the form of pre-planned holidays or sudden absences, projects and resources can be affected by unexpected delays. Detailed PTO planning not only prevents time off from harming your business processes and margins, it can help encourage employees to take their vacations. With the right balance, employee morale and business efficiency can remain high without negatively impacting one another.

Keeping Your Projects On Track

Time off will keep employees from burning out and prevent high turnover rates, but it can also set back projects and complicate resource scheduling. If your business cannot properly predict and plan for time off, these setbacks will continually occur and cause greater complications than they should. Make sure that you understand which employee can best take over another team member’s tasks before he or she goes on vacation for a smooth transition.

Having a well-constructed PTO tracking and approval system is the first step toward preventing the negative effects of time off and emphasizing the upside. Being able to easily view and anticipate employee time off can allow managers to prepare their staff, coordinate schedules, and determine task responsibilities based on comparable skill levels. A properly executed time off strategy will shift project responsibilities and ensure that tasks are reassigned before an employee goes on vacation so that work can continue without them. Access to task information and client contact information should also be readily available so that employees are not locked out of crucial processes when the time comes.

Supporting Employee Morale

Poorly-managed PTO affects more than just project strategy, it can also lead to higher employee turnover rates. BBG Broker states that on average turnover costs approximately 20% of an employee’s annual salary. This is due to the costs associated with hiring and training a new employee, as well as paying a departing employee for his or her unused PTO. Should a large number of employees with substantial accrued PTO leave within a short period of time, your company can have its margins suddenly reduced due to the amount of extra wages paid out to employees who have left.

Being able to take time off as needed is proven to have a positive effect on employee morale, with flexible scheduling and ample vacation days helping team members stay healthy and relieve stress. However, poorly handled time off can negatively impact those who are still at work. According to a study by Kronos, 69% of employees surveyed say that unplanned absences add to their workload and 61% believe it increases stress. Being able to track absences and prepare for, or even prevent, unplanned days off can help eliminate changes in workload and the stress they cause.

While it’s not possible to predict sick days or all PTO that comes with short notice, a time off tracker can give managers a quick view into how many days each employee has available and when they are most likely to use them. By effectively managing PTO requests, you can reduce unplanned absences and improve morale in both those who are on vacation and those who take on their responsibilities.

Want to Learn More?

To learn more about how to optimize resource planning, read the eBook, “Forecasting & Optimizing Capacity.”