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Why Is PTO Important? 7 Reasons to Prioritize Paid Time Off

A lot of business owners, or department managers, or team leaders, balk at the idea of paying people not to work.

It’s why the USA still doesn’t have any federal law requiring companies to provide paid time off, and why nearly a quarter of US employees don’t have access to paid time off.

Yet PTO is an important and necessary benefit – nearly as important as the employee’s actual compensation.

There are many reasons why. PTO helps employees remain fit and healthy, both physically and mentally. It leads to higher morale, fewer workplace issues, and a more talented workforce.

Some companies view PTO as an expense, when it should really be seen as an investment in higher-performing employees, and a more stable business.

In this article we’re going to dive deeper into the topic, with seven key reasons why PTO is important, followed by some tips on building the type of culture where PTO is valued and employees don’t feel guilty about taking their vacation time.

1. Time Off Reduces Stress

Taking time off (especially when using this time off to travel and see new places) is proven to have a positive effect on stress levels.

Stress builds up slowly, but consistently, over the course of a regular working schedule. PTO gives the opportunity to disconnect from work, take a break, and let stress dissipate before it turns into more serious, chronic conditions (such as burnout).

2. More PTO Means Less Absenteeism

Allowing employees to take more time off can reduce the regularity of unscheduled and/or unexcused absences.

The steady buildup of stress we discussed above, if not constantly addressed, leads to illnesses or cases of acute stress and anxiety. These often result in employees being late, failing to turn up, or calling in sick on short notice.

By managing stress levels, regular, scheduled vacations, of even just a few days here and there, keep employees fresh and reduce the chances of unscheduled absences (which cause a bigger disruption than scheduled PTO).

3. Frequent Breaks Improve Workers’ Mental Health

The issue of mental health at work is becoming, perhaps not more prevalent, but more widely understood today.

Depression, anxiety and chronic stress are problems that almost all of us are faced with at some point, and exacerbated by long periods of work, and the pressure of having to constantly deliver a high level of performance.

Vacations and active leisure activities outside of work are proven to reduce the harmful effects of job-related stress and depression.

It’s even been shown that very small breaks, even as small as a few minutes away from your desk, can be enough to reduce anxiety; and breaks of a few days can achieve this on a higher level.

4. PTO Helps Prevent Heart Disease

Vacations and taking time off work can reduce the likelihood of heart disease and cardiovascular-related deaths.

Numerous studies [1][2][3] have provided evidence to support this. Better physical health is, of course, a positive for employees, but also a positive for the company, as more healthy employees are less likely to have long periods of sickness-related absence or turnover, and typically are able to perform better in their jobs.

5. Taking Time Off Makes Employees Happier

Employees are happier when they have the opportunity to take frequent breaks and do things outside of work that they enjoy and value, such as traveling, working on personal projects, or spending time with family and friends.

There are numerous benefits to boosting the happiness of employees, including lower turnover, which can cost businesses hundreds of thousands per year in direct costs alone.

Happier employees are also shown to be more productive, so it’s in the company’s best interests to keep workers with a smile on their face.

6. Offering Paid Time Off is a Competitive Advantage

Attracting top talent is becoming more and more difficult, yet is crucial to building a successful and sustainable business.

PTO is a great incentive to be able to offer job-seekers who have multiple job offers to choose from. 

In some fields, simply offering some PTO may set you apart from the other hiring companies competing for talent. However, with most teams waking up to the importance of PTO now, it can pay to place your PTO rate above average for your industry.

7. PTO Helps You Build a More Skilled Team

While many feel it’s an unnecessary burden to cover for staff who are on leave, this can actually be a significant positive for your business.

When employees take more frequent breaks, other employees need to step in and cover their responsibilities, forcing them to learn and grow, and develop a wider skillset.

Out of necessity, you start to build a more skilled team, with more people capable of performing a wider range of tasks and jobs.

This can improve employees’ ability when returning to their regular job, as well as ensuring you have people ready to step up should other employees get sick or injured, or leave the company.

How to Make PTO a Priority In Your Workplace

Understanding why PTO is important is the first step to building a happier, healthier and more productive workplace.

The second is ensuring that you offer enough PTO. Don’t shoot for the minimum; offer a competitive PTO package that provides enough time off for your employees to take regular vacations and get the time off they need to stay fresh.

But even that’s not enough. More than half of all US employees don’t use their PTO. This is often due to pressure, a high workload, or fear of falling behind or being looked at in a bad light if they take time off too regularly.

Yet it’s in the company’s best interest for employees to actually use their PTO. That’s why you need to build a culture where taking PTO is normal, and encouraged.

Here are some tips to achieve this:

  • Educate employees on the importance of PTO, and tell them that they’re encouraged to take all the time off available to them.
  • Set the example from the top; make sure leaders don’t neglect their time off.
  • Don’t glorify overwork or “hustle culture”.
  • Regular check in with employees and make sure they’re taking regular breaks (an app like Flamingo is great for tracking leave and getting regular reports on employees’ leave habits).
  • Consider implementing mandatory vacation policies or company-wide shutdowns to ensure everyone takes sufficient time off.

On top of this, make sure employees know that you expect them to fully disconnect when they take time off. Don’t expect people to answer emails or stay in contact with work tasks when they’re on leave.

Final Thoughts

All of this – providing ample time off, encouraging time off, and actually being proactive to ensure that employees take more PTO – may seem like a greater cost to the business. But it saves you money long-term.

You reduce the cost of absenteeism. You reduce turnover, which saves more money for the business with less hiring, onboarding and disruption and their associated costs.

You’ll have happier, more productive employees, who perform better, and produce more for the business.

And you’ll also attract (and retain) better talent, who help grow the business.

Don’t think of PTO as an expense any longer. Think of it as an investment in the future of your business.

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