HR Glossary

What is Voluntary Time Off (VTO)?

Discover how, if done correctly, voluntary time off can allow employees to find the perfect work-life balance while lowering company costs.
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Voluntary time off, or VTO is a form of employee leave that companies commonly use to deal with workloads and staffing requirement fluctuations. Simply put, if the workload is light and more employees than needed are working, some of them can take VTO.  

Hence, the employee can take unpaid time off without repercussions to their employment status.

Why VTO?

A good VTO policy has many positives for the company and the employees.  

Creating schedules is an exact science, but sometimes, too many employees may be scheduled in a shift due to unforeseen circumstances. In that case, the company may suffer financially.    

When this occurs, some businesses allow the extra employees to take unpaid time off to save money. When more workers are available to work than needed in one shift, the company provides the VTO option, thus, minimizing expenses.  

On the other hand, by shifting employees, companies can get more enthusiastic and rested personnel.

1. Recruitment

Recruiters can have a field day pitching this option to prospective employees as a benefit. Occasionally, employees may need more time for running errands or family emergencies. This option can go a long way towards recruiting people working in an environment with strict rules but are looking for more flexible work arrangements.

2. Retention

A company can maintain the retention rate by offering VTO as a benefit. However, management needs to ensure that employees are aware of the VTO benefits.

What are the Drawbacks of Voluntary Time Off?

There are some disadvantages to taking voluntary time off.  

Employees, for example, may be conflicted about whether to take VTO or stay and earn more money. This can lead to employees believing that saving money for the company is more important than trying to be available for a shift, such as commuting to work and arranging childcare.   

Circadian reported that employee absenteeism costs $2,660 annually for salaried employees and $3,600 for hourly employees. According to Forbes, these figures reflect the worker’s absence and the cost of replacement workers, reduced productivity, and decreased quality of goods and services due to understaffing.  

Employees’ main issue is getting paid less and in a varying monthly amount. Moreover, companies can suffer from unmotivated workers who are no longer interested in working towards the company’s objective. Hence, HR managers need to layout VTO as an option, not a necessity.

On a Final Note 

If done correctly, voluntary time off can allow employees to find the perfect work-life balance while lowering company costs. Today, many employers offer VTO as an employee benefit. Therefore, with VTO, companies can present a win-win situation for prospective workers and a long-term retention plan for the company employees.

Written by shortlister editorial team

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