Which PTO policy is right for your business? Local companies offer clues | Expert Opinion

In today’s competitive labor market, offering the right paid time off (PTO) policy can be one of the most effective ways to attract and retain top talent. But is there any one best plan?

The answer is no. It depends on culture, management, and company size. Here are some strategies local business owners use.

Putting vacation hours on account — or “banking” them — is a popular approach.

Beyond Literacy, a nonprofit adult education organization allows its full-time employees to immediately bank 192 hours (24 days) with increases after three years. Sick days are included in this amount and managed with a “trust-based approach,” said Kimmell Proctor, the organization’s CEO.

“We see balance as essential to keeping great team members, delivering high-quality services, and building an equitable workplace where our people can enjoy and sustain their careers,” he said.

In addition, the organization allows time off for national holidays and is closed for the week between Christmas and New Year’s, when employees receive paid time off in addition to what they’ve banked.

They also provide paid bereavement leave, parental leave, jury duty, voting leave, and other protected time off.

Accruing is an accounting term that means “earning.” Some companies let their employees earn their PTO by the hour, others by days.

Streamliners Management Consulting — a Wilmington firm that helps private equity firms and large manufacturers improve their performance — currently offers its 40 employees 10 PTO days a year, with sick days included. The company plans to increase this to as many as 15 days and allows employees to take unlimited unpaid leave for medical or personal reasons.

“There’s also a lot of downtime between projects which allows our employees to rest,” said Andreas Haag, the company’s cofounder and CEO.

Philadelphia development company Alterra Property Group allows its 134 employees to accrue as many as 16 PTO days in their first year, which then increases to 18 days after five years and 20 days after 10 years of full-time employment. Sick and personal days are included within the PTO accrual policy.

The company also gives paid federal holidays and closes its corporate office for the week preceding Labor Day but pays employees during that week.

According to Tisia Baynes, Alterra’s senior vice president of human resources, this policy has significantly lowered turnover rates.

“Our employees are taking their vacations, getting married, and buying homes, and that’s what management wants,” she said.

In Plymouth Meeting, 25-person marketing agency beMarketing does PTO accrual by hours. Employees earn up to 11 days in their first year, 16 days in years two through four, 21 days in years five through 15, and 26 days after 15 years. Employees use their PTO for sick days. The company also provides time off for federal holidays and employee birthdays. At the end of the year, employees can carry over up to eight PTO days to the next year.

“We actively encourage our team to use their PTO, not just accrue it,” said Brandon Rost, beMarketing’s CEO. “We tell our people that our culture isn’t built around tracking hours or comparing vacation policies. It’s built around clear expectations, meaningful outcomes, and trust.”

Nature’s Vin, a boutique wine shop in Wayne, has a unique approach to vacation time: closing the business, at least temporarily.

“We have extended business closures during the summer and winter seasons to allow employees dedicated time off for rest and personal activities,” said Ragini Parmar, the shop’s founder and owner.

The company also offers five sick days a year to full-time employees (two days for part-timers) and time off for most national holidays.

An unlimited PTO plan has worked well for my company.

So, too, for Philadelphia marketing agency MOD Worldwide. MOD offers an unlimited PTO policy for its 45 people, with a built-in minimum of seven business days. Sick time can be taken as needed, and there’s additional time off for national holidays, bereavement, and parental leave.

According to Gabrielle Molina, MOD’s director of people and culture, usage is reviewed quarterly to ensure that employees are taking adequate time off.

“We actively encourage employees to take time off, she said. “Even with unlimited PTO, sometimes people don’t take enough time to properly reset and recharge.”

Molina says that after five years at MOD, she’s never seen an employee abuse the PTO policy.

“Our employees are encouraged to take care of themselves and do not operate in fear of repercussions for taking time off,” she added.

Molina’s perspective mirrors most of my clients. As the labor markets tighten and AI disruptions loom, many employees may feel anxious about taking time off. Good business owners and managers are aware and continue to encourage employees to take their PTO.

“There are certain jobs that can’t be automated or be replaced by AI and they still need to be done by humans,” said Haag, of Streamliners Management Consulting. “It’s crazy that these employees don’t take their vacations because they’re afraid they’re going to be replaced. The job market is there.”