Different shades of PTO: How both blue and white collar employees fight for their accrued benefits

As previous work norms and ideas about productivity begin to fade, there’s a tectonic shift taking place in the workforce today that’s moving faster than employers can keep up with. In the last two years, we have seen employees across every walk of life and occupation start to look for positions that offer greater flexibility and promote mental health and wellness. This phenomenon has led to businesses becoming much more competitive in how they offer benefits programs and compensation packages to prospective employees.  

But one area of benefits that still needs to be re-examined altogether is paid time off (PTO). As it is currently constructed, PTO has proven to be inefficient for employees and a financial liability for businesses, creating a massive market failure. As much as it would seem like everyone wants to go on vacation, statistics show that most of us aren’t using up nearly as much of our hard-earned time off as we should be. In fact, over half of employees leave close to 800 million unused days on the books each year and forfeit up to $65 billion in benefits.

So why is it still so hard for workers to take time off?

Oftentimes, taking PTO comes with this guilt that your teammates will have to take on extra work, you will fall behind in performance, or a perception that your boss will see you as weak. No matter how much time an employee accrues, the encouragement to use it differs among all levels of work. Both white and blue collar workers subscribe to the theory that the more you work, the more time you get and the more money you take home because your time will carry over. However, that is not really the case, since most companies do not allow you to carry over all of your unused days.

When employees keep unused time on the balance sheets, their company ends up losing out; the time wagered out for their employees is wasted and could have been allocated elsewhere in the budget. While many CFO’s and HR departments might be persuaded into transitioning to unlimited PTO policies because of this, research shows this alternative is actually much worse for employees, since workers with unlimited PTO typically end up using less vacation days to recharge and earn about $2k less annually than their peers. Unlimited PTO policies can also do more bad than good for the company by causing higher burnout rates and in turn, a big decrease in productivity.

How PTO benefits impact white collar vs. blue collar workers

White collar workers

As a white collar worker, there can be a feeling that you’re tied to the job even when you’re done with your work day. Your computer is portable, your phone is handheld with recurring alerts and job-focused ideas circulate your mind constantly. Whether you’re a lawyer, marketing consultant, or sales executive, etc, these types of salaried workers are typically not compensated for working overtime and rarely question this disadvantage.

These occupations include policies that are driven by working more to earn more, (i.e. earning x vacation days per month or so) which tempts workers to hold their time for a “rainy day” because 5 PTO days is inferior to 25. However, employees get starstruck by the amount accrued and do not realize how soon the expiration date might be approaching, meaning this time needs to be used up before it is lost.  

Blue collar workers

Blue collar worker compensation differs from a white collar’s and is reflected in the way they accrue PTO because they are paid hourly. But, “the more you work, the more you earn” strategy is present, as these workers are paid overtime for the more they work. Providing an overtime pay-out sounds like a nice incentive to get your employees to work more and increase productivity. And most employees will take additional compensation over using PTO. 

On the other hand, having little to no incentives to take time off can also be a bum deal for these workers, since their job descriptions require physical labor that can be a burden not only to their minds, but to their body as well. Even with PTO as an option to use, employees still feel the motivation to keep working, which only furthers the risk of injuries that might put them out of work long-term. Blue collar workers (hourly, hospitality, retail, QSR, etc.), however, aren’t always so lucky, and might not have any vacation days or even holidays (time and a half is the incentive) at all. This has led to many sectors seeing double digit wage inflation, and the existing workforce taking double shifts.

Looking ahead

With the “Great Resignation” upon us, and more American workers reporting that they feel burnt out or mentally exhausted, companies are clearly still struggling to respond. Businesses should look to new tech-driven solutions that can help them both optimize their corporate balance sheets and encourage employees to take the time they need.

As workers of all shades look to the new year, many are starting to rethink and reevaluate how to find a healthy work-life balance and avoid work stress. That’s where PTO can come into play as their saving grace; a policy workers and employers need to re-evaluate in order to drive more efficiency and create a win-win solution for everyone.

Veetahl Eilat-Raichel is the CEO of Sorbet.