Benefits: Time Off You Can Bank On
"We were beginning to grow, and it was always tough when someone came to us and wanted time off," recalls Bill Liebegott, president of $3.5-million Hi-Tech Hose, in Newburyport, Mass. "We had to make a lot of emotional decisions." Liebegott decided to take the emotion out of his company's time-off policy. All 24 hourly employees now have their own "paid-time-off (PTO) banks" -- an innovation suggested by Liebegott's partner, Jerry Feijoo, who had seen the idea work well for his former employer, a large engineering firm. In fact, PTO banks are becoming increasingly popular among both large and small companies. (See "Managing Paid Time Off," [Article link]. Here's how it works at Hi-Tech Hose:
During their first two years at the company, hourly employees bank 4.67 hours of time off with pay each month, a year's total of 7 days. They draw from their PTO accounts to cover any absences. The number of hours an employee accrues each month increases with seniority: a 20-year veteran, for example, earns 15 hours a month, or 22.5 days a year. Employees may immediately withdraw from their PTOs or squirrel away the saved time indefinitely.
"Employees have choices for using that time off," says Liebegott. "They may use it for vacation, personal, or sick days, or just accumulate it. It's like a savings account -- it's theirs forever." Once they've banked more than 80 hours, workers may redeem the excess hours by cashing out at their current rate of pay.
Employees like the plan because its flexibility eliminates any need to tell white lies. "You don't feel pressure to explain why you need time off," says Diane Dawson, the company's office administrator. And, Liebegott adds, "it takes a lot of stress off the owners. Before, the process was arbitrary. Now everyone is on the same level, and we don't have to make tough decisions."
DONNA FENN | Inc.com Contributing Editor
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.