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PTO Calculation - How do I calculate cost to the company?
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PTO Calculation - How do I calculate cost to the company?
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Hello. I am currently proposing a change to the PTO process for my organization, and my COO would like to see some type of number indcating what the cost to the company will be and if the company can
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Forums » Topic Forums » Benefits & Compensation » PTO Calculation - How do I calculate cost to the company?
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PTO Calculation - How do I calculate cost to the company?
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PTO Calculation - How do I calculate cost to the company?
posted at 12/17/2009 3:03 AM EST
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Posts: 2
First: 12/17/2009 Last: 12/17/2009 |
Hello. I am currently proposing a change to the PTO process for my organization, and my COO would like to see some type of number indcating what the cost to the company will be and if the company can sustain an increase in PTO days to it's employees. Essentially, he wants the metric to show that we won't have to hire any new people to make up for so many people being out because they have more PTO days to use now. I can't seem to find anything on the matter although I remember performing this calculation before. Does anyone have any suggestions? |
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PTO Calculation - How do I calculate cost to the company?
posted at 12/17/2009 6:03 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
First I would get an hourly rate for all employees. I would take each salaried employees salary and divide it by 2080 to get an hourly rate. I would use the hourly rate for hourly employees.
From there, I would multiply each individually by the increase in the number of PTO hours you are suggesting be given. Sum them to get the cost of what would be paid out for the time that the employees were not working. Add to that any cost of replacements needed during the nonworking time (temps, overtime, etc). What kind of industry/business are you in? When an employee takes time off, do they usually have to farm their work out to others during that time or does it just mostly sit and wait until they come back? That could make a huge difference. Have you checked to see what PTO policies your competitors have? Both those in your industry and those in your locality? One last question -- if you give more PTO, are your employees really going to be able to take the time? There's no use giving them more if it ends up they can't or don't use it! I have 4 companies I do HR for....at only 1 do all the employees use all their available PTO. The rest generally have some left over...so giving more would be useless (and our plan is not that generous to start with!) |
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PTO Calculation - How do I calculate cost to the company?
posted at 12/17/2009 6:13 AM EST
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Posts: 2
First: 12/17/2009 Last: 12/17/2009 |
Thanks for your help...I'll look at all of that as soon as I get the opportunity!
I'm in education services...we provide educational tools and performance management products for teachers. Many of our employees don't take actual vacations, but they do use their PTO a couple days at a time here and there. Last year we had several employees who lost time, however, because they did not get the opportunity to use it. We are semi-competitive within our market regarding our current plan. I am trying to figure out a way to reward my employees for all of their hard work because we have a really dedicated team. Most employees will help out with another's workload if they are on vacation, and we generally don't hire in temps as the work is very specific and we would not have time to train a temp. Thanks! |
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