Startup lets employees swap PTO for other perks and benefits
- A new company wants to show employers how to let workers trade off their unused paid time for other perks, reports the Los Angeles Times. Seattle-based PTO Exchange says the tradeoff could be additional contributions to a 401k (if not maxed out), money for college tuition, donation to a charity or travel-expense reimbursement.
- The company is responding to two age-old problems for businesses. The first is what to do with extra PTO on their balance sheets. Some states have outlawed “use it or lose it” benefit policies, which means unused PTO gets carried over year after year. The second problem is how to offer more benefits and perks as cost-effective hiring and retention tools.
- The startup launched at an HR technology conference in October. Rob Whalen, co-founder, said that since then, 150 companies, including HR consulting firms, pharmaceutical companies and retailers, have shown interest in PTO Exchange’s concept.
Companies don’t have to add new and often costly benefits under PTO Exchange’s business model. They can allow employees to trade off one perk for another and close their books at year’s end. The question is whether to make PTO tradeoffs a company policy, similar to the “use it or lose it” rule, or maintain the cash-out option.
To counteract the PTO problem, some companies have shifted to an "unlimited" vacation policy, though it comes with flaws as well. Some industries struggle with employee burnout due to not taking the time off they need, an aspect of PTO that should be considered.