How convertible paid leave benefits can demonstrate your commitment to DEI
By: Rob Whalen, co-founder and CEO of PTO Exchange
While many companies tout their DEI initiatives, a real commitment to diversity and inclusion requires more than updated policies and periodic anti-bias training. Companies need to go to the next level and ensure that DEI is an integral part of how they interact with and reward employees. A byproduct of these efforts will lead to more employee engagement, increased loyalty, and reinforcing a healthy workplace culture
The centerpiece of this effort should be a focus on convertible paid leave. Too many companies offer a one-size-fits-all paid leave benefit package which doesn’t take into account the differing priorities and needs of their diverse workforce. A prime example is a paid time off (PTO) policy that forces people to use vacation they don’t need or forfeit altogether. There’s no reason that employees with different priorities and circumstances should be prevented from taking full advantage of their hard-earned benefits, which is why companies need to develop creative solutions (such as convertible PTO) to help them do so.
Diverse employees don’t want to be treated as interchangeable cogs at your company – they want their individual needs and concerns to be respected. By providing flexible paid leave benefits, companies will demonstrate that they take DEI seriously.
Building and maintaining a diverse workforce
Diversity isn’t just crucial for improving performance and increasing innovation – it’s also necessary for recruiting, as over three-quarters of candidates say a diverse workforce is an important factor when considering potential jobs. Diversity also has a significant positive impact on a company’s culture, as it leads to a more inclusive environment and exposes employees to a wide range of backgrounds and perspectives. This can improve morale and retention.
Flexible benefits, specifically flexible options for converting paid leave, have a multiplier effect on all of the above. Not only do these benefits attract a wider range of candidates (which broadcasts your commitment to diversity to the labor market) – they also make it more likely that your existing workforce will stay with the company. We have research that suggests that 9 out of 10 employees would feel more loyalty to firms that offer the option to convert paid leave into other financial assets At a time when there are five generations in the workforce and companies are becoming increasingly diverse, your healthcare, retirement, and PTO policies need to be capable of supporting the full range of employees’ needs.
A concrete commitment to equality
As workplaces become more diverse across many different dimensions – race, gender identity, sexuality, family circumstances, and so on – companies will increasingly declare that they’re serious about equality and inclusion. But how much of this rhetoric is accompanied by concrete changes that actually support a diverse workforce? For example, how many companies still offer static PTO programs which benefit some groups of employees more than others?
Paid leave is already a notoriously under-utilized benefit, with more than 768 million days left unused annually, according to research from the U.S. Travel Association. Even more revealing, our research found that there are income, racial, socioeconomic, and gender gaps in how much vacation time employees take. For example, nonwhite workers are 19 percent less likely to take all their leave every year compared with white workers. From divergent family responsibilities to unequal financial circumstances and workloads, there are countless reasons for employees to use PTO differently. The same goes for other benefits: young employees won’t have the same medical needs or retirement strategies as their older colleagues, workers with different career paths and interests won’t be interested in the same professional development opportunities, and so on.
It’s the HR team’s responsibility to build a benefits package that meets all employees’ individual needs and priorities. This will reduce turnover, improve your culture, and communicate to your employees that equality and inclusion actually matter to your company.
A foundation for inclusion
More than two-thirds of the respondents to a 2021 PwC survey say culture is an important topic for their company’s leadership – a proportion that has steadily increased over the past several years. In fact, 66 percent of executives believe culture is more important for performance than their company’s strategy or operating model. As diversity and inclusion become increasingly vital to the maintenance of healthy company cultures, HR professionals need to do everything possible to build an environment that supports different priorities.
Employees want to feel like they’re part of a community that values their unique contributions. It’s no surprise that a key element of workplace engagement (according to Gallup) is the view that “At work, my opinions seem to count.” Employees won’t feel included if their individual needs and voices are neglected, but many companies still insist on providing paid leave benefits that don’t work for millions of people and their different circumstances.
It’s long past time for companies to abandon this status quo and bring their benefits platforms into alignment with their commitments to diversity and inclusion.