Employees list paid time off (PTO) as one of the most valuable benefits of employment. In fact, most employees would pick a good paid benefits package over a pay rise. And why wouldn’t they? With a good PTO policy, they don’t have to worry about choosing between working and spending time with their families. Further, their income is secure when they are unwell and they can take some time off work to blow off steam when fatigue hits.
Employees are not the only ones who benefit from PTO. You too can get so much out of a well structured PTO policy. You may have noted the dwindling number of skilled workers in the trades. Well, a good PTO policy will boost your company’s attractiveness to potential workers. You get to keep all your good workers and attract the top brass of the industry. And that’s only the start.
In this article, I’ll show you how you can create a great PTO policy for your company. But first, let’s talk about why you need one.
This article covers:
- Why You Need a PTO Policy for Your Construction Company
- Factors to Consider when Creating a PTO Policy for a Construction Company
- Designing the PTO Policy for Your Construction Company
- Final Thoughts
Why You Need a PTO Policy for Your Construction Company
1. Increased morale and productivity
Smart employers do not underestimate the value their employees place on PTO. By offering a few paid days off, you will unlock a world of benefits. Your employees will be more productive and you’ll have less turnover. Most importantly, your employees will report less fatigue which, as you know, is the cause of most accidents in the construction industry.
2. Control over employee absence
If increased productivity and boosted employee morale do not convince you to get started on creating a PTO policy, the control you will gain over employee absences will. Imagine a few workers failing to report to work on plaster skimming day. With a good PTO policy, you will never know this struggle. You will have full control over your employees’ schedule.
Here’s how. HR industry practices recommend that some types of PTO such as vacation days be booked weeks in advance. You can structure your PTO policy to require employees to put in requests for time off a few weeks in advance, with a few exceptions for emergencies, of course. You will plan your projects better if you know how many workers you expect to report to work on every given day.
3. Legal Compliance
Some PTO is mandated by law. In some jurisdictions, companies are required to offer specific types of PTO and a set number of paid leave days. This could be anything from sick leave or bereavement to a set number of paid days off for new parents. A good PTO policy is a great way to comply with these laws.
If you are not sure how much PTO you are required to offer your employees, your state or country’s labor and employment laws are a great place to start. If you can, consult an attorney to guide you.
4. Administrative efficiency
As the manager or owner of a construction company, I’m sure you have a million things to do. And the last thing you want to do is add onto your already full plate. But what if I told you that a PTO policy could actually reduce your workload?
All you have to do is create a policy that consolidates all the types of paid leave you offer into one PTO package. You can then use a PTO tracker to automate and track all your employees’ paid days off efficiently. Learn all about PTO trackers here. Here’s a great PTO tracker to get you started. And guess what? It’s free.
We’ve established that you need a PTO policy for your business and I know you’re eager to start creating one. But here are a few factors to consider before you get started.
Factors to Consider when Creating a PTO Policy for a Construction Company
1. The law
The construction industry is highly unregulated. But that does not mean that you are not bound by labor and employment law. Be sure to brush up on your knowledge of the law. One instance of non-compliance could cost you money in fines or worse, have the authorities shut down your company.
2. Industry practices
Your state or country’s labor laws may not require you to offer any type of paid leave but the industry certainly does.
The construction industry is facing a serious labor shortage. Companies are using any means to entice younger workers to join the trades. One of these incentives is a generous employee benefits package. You can hop onto this trend now by offering an attractive benefits package. But first, you need to create a good PTO policy.
3. Types of PTO
Third, explore different types of PTO. These include sick leave, bereavement leave, vacation days, and parental leave. Explore different types of parental leave and study up on the circumstances under which employees will qualify for each type of paid leave. This is also a good time to consider which public holidays you will allow staff to stay home without losing their income for the day.
4. Business needs
Finally, consider how your business is structured and let your business needs guide you. Do you complete projects concurrently or one project at a time? What does this mean for your staffing needs? Do you have busy and slow seasons? If you have slow days, you can create a policy that incentivizes employees to use up their paid vacation days then.
Once you have the answers to these questions ready, it’s time to create your company’s PTO policy.
Designing the PTO Policy for Your Construction Company
1. Determine the types of PTO you will offer
Decide the number of paid days off you want to offer. I know what you’re wondering. How will I know how much PTO is enough? Here is where the industry practices you researched earlier come in. You can involve your workers here. Asking for their input will make them feel valued. And your PTO policy will reflect their needs.
Next, determine the best way to distribute paid leave days among vacation days, personal days, and holidays. Here, you can offer your employees some flexibility. Allow them to decide how they allocate their leave days.
Move on to emergencies or events that employees cannot anticipate. Here, determine the number of days you will allow for bereavement, illness, and other emergencies. Once you have made these decisions, write them down. You have completed the most critical part of your PTO policy.
2. Select your PTO model
It’s time to make the second most crucial decision; how will you compute PTO? Here you have a few models to choose from.
The first model is an accrual system. Under the model, employees accrue leave days based on the number of hours they work. To ease your administrative workload, you can use the forty-hour week as the base for your computations. For an even easier time, invest in a good construction time tracking software.
A second model combines all paid leave days into one pool. Every time an employee takes some time off, their pool narrows. This model requires less administrative work and gives employees flexibility on how they use their PTO.
Third, you can offer unlimited PTO. Here, your employees can take as much time off as they need as long as they finish all their assigned work. This model is the easiest to manage and needs virtually no administrative work. However, it would be difficult to adopt in the construction industry since it exposes you to understaffing.
Once you decide which model is best for your company, write it down. It is now part of your policy.
3. Establish your eligibility and rollover criteria
You have determined the types of PTO you will provide and how you will compute an employee’s paid time off. It’s time to decide when these benefits will become available to your employees. Since most construction workers are uncontracted, there is no industry standard to learn from. Therefore, the eligibility criteria for PTO is at your discretion.
Most companies in other industries require their employees to complete a probationary period of 90 days before PTO and other benefits kick in. You can adopt this policy and adjust it based on your business needs. You know the labor market in your city, state, or country best.
Your eligibility criteria should state how long an employee should work for you before unlocking PTO. If you chose the accrual model, the policy should state how many hours an employee is required to work to accrue one hour of paid leave as well. Similarly, you should state any PTO benefits that accrue after a year of service.
Once you’ve added your eligibility criteria to your policy, it’s time to decide what to do with unused leave days. Here, you can decide to roll over unused PTO to the following year. Some companies adopt a ‘use it or lose it’ policy under which all leave days expire if not taken within the year. If neither of these options are appealing, consider compensating your workers for unused PTO. Once you make a decision, add your preferred model to your policy.
4. Create a leave request workflow
Finally, create the process that your employees will use to put in their requests for paid leave. Let your corporate structure and level of automation guide you. If you prefer to use a manual system, you can have your workers submit leave requests to their foreman, who either approves them or passes them along up the corporate structure. If your systems allow, you can automate the process.
Whether you choose a manual or automated process, be sure to create a clear process of applying for leave. Remember to include how far in advance employees are required to put in requests for each type of PTO. Once you have created the request workflow, write it down. You now have a complete PTO policy. All you have to do is refine and adopt it. Don’t forget to share it with your workers.
Final Thoughts
In conclusion, a PTO policy is a great tool for managing your employees’ paid leave. A good policy will reduce the administrative work involved in leave management while allowing your workers enough time to recharge. Your policy is your secret to thriving in a construction industry that is grappling with labor shortages. The extra perks won’t hurt either. You will notice a boost in your employees’ productivity, reduced accidents at work, and low worker turnover.
Create your PTO policy today and watch your construction company thrive. Don’t forget to keep an eye out for changing trends in employee benefits and incorporate them to keep your PTO policy competitive.
