Over the past few years as I’ve interacted with people searching for an online PTO tracking system, I’ve had a lot of discussions about the pros and cons of allowing PTO rollover.
For those who don’t allow any rollover of unused time off at the end of the year, it seems like one of the top reasons is that it adds a bit of extra work for the HR staff to calculate and track this information. When using paper forms, emails, and a spreadsheet to request, approve, and track employee time off, the amount of manual work required to keep all of the numbers accurate and up-to-date can be overwhelming. With that in mind, it makes sense that the company would desire to keep the policies for tracking vacation and sick time as simple as possible. The fewer moving parts, the easier it will be to track.
With an online, automated time off tracking solution like Built for Teams, though, all of the work is done for you. This opens the door to creating time off policies that are more complex, but that are just as easy to manage. Why add complexity in the first place? Well, when it comes to rollover/carryover of unused time off at the end of the year, there are a couple of key benefits.
1. Employee Retention
In today’s competitive job market, you need all the help you can get to attract and keep great employees. By allowing employees to carryover unused time from one year to the next, you’re giving your employees some additional flexibility and trust in terms of how they use their time off. This is definitely viewed as a perk! Employees value working for a company where the PTO policies are generous and flexible.
2. End of Year Staffing
With a use-it-or-lose-it paid time off policy that requires all hours to be used by year end, a situation can arise in which too many of your employees are scrambling to use their time off at the end of the year. If your business is one that requires a certain level of staffing at all times, this can create a problem. Either you’ll have too many employees out on vacation at the same time, or you’ll have to tell employees they can’t use the time off that they’ve requested. Either way, it’s a lose-lose. By allowing at least some paid time off to rollover to the next year, you’ll alleviate this problem by allowing those employees who didn’t use all of their time off in the current year to use some of those hours in the next year. No more end of year PTO rush!
Having worked with hundreds of companies as they transition from using spreadsheets and paper forms to using Built for Teams for PTO tracking, my recommendation for most companies is to allow at least half of an employee’s vacation hours to rollover/carryover to the next year. Your situation may warrant doing more or less than this amount, but in nearly all cases I believe at least some PTO rollover or carryover is advisable. If you have any questions about how to design the best PTO carryover policy for your organization, feel free to reach out to us via our support site. We’d love to help!