An Employee Wellness Report has shown that over 50% of Malaysian employees experience job-related burnout. For employers and companies that prioritize their employees, this means finding a way to reduce burnout for their employees. A good strategy for this is introducing voluntary time off (VTO) to increase workforce productivity.

Although implementing this policy can help reduce employee fatigue, proper attention must be given to how it works. In this article, we will help you understand what you need to know about VTO, what you stand to gain, and the things to consider when executing it in your organization.

What is voluntary time off (VTO)? 

Voluntary time off (VTO) is a company policy that gives employees the right to take unpaid leave at their employer’s discretion, usually during less demanding work hours or seasons.

VTO is determined by the business’s demands, as opposed to typical leave policies, which employees use for private reasons. Because employees need the flexibility that comes with their work and personal life, this policy can be effective to stifle that balance. 

With this approach, companies can encourage a better work-life balance by understanding the VTO meaning and improve on creating a workplace culture that is comfortable for their employees.

What is the difference between PTO and VTO? 

It’s a known fact that both paid time off (PTO) and voluntary time off (VTO) are time off policies, but they serve different purposes. 

PTO is a paid benefit employees enjoy for reasons such as vacation, sick days, or any personal occasion. And it’s mostly allocated with a set number of days that can be taken whenever they want.

Conversely, the VTO meaning refers to an unpaid leave option that employees use when companies have reduced workloads or when they need to adjust their workforce. It’s a flexible working policy for companies to manage labor costs without resorting to forced layoffs or cutting costs. 

However, it’s important to note that employees can choose to take voluntary time off or not. Once taken, employees will not be paid during the duration of voluntary time off. 

The main difference between paid and voluntary time off is in the purpose and usage of both policies. PTO is paid for personal reasons, while VTO is unpaid and is a strategy for companies to manage overstaffing costs.

What are the types of VTO?

There are many types of voluntary time off; here are two of the most common ones in organizations: 

Unpaid leave

This is the basic voluntary time off observed. Unpaid leave is the time off enjoyed by employees without receiving pay and it can be used for personal or family reasons, or simply to recover from burnout and focus on well-being. 

In most cases, employees don’t receive their regular salary during this period, although they may still qualify for certain benefits like continued health insurance or retirement contributions. This leave gives them a chance to focus on personal well-being and return to work refreshed and motivated.

Read next: Why Mental Health Days Are Essential for Your Employees

Volunteer time off

VTO is a voluntary time off that provides employees with voluntary unpaid leave to help with the organization’s overstaffing issues. In rare cases, this voluntary time off can be compensated on a case-by-case basis or due to company policies.

What are the benefits of a VTO policy?

Companies looking to implement VTO policies need to know what they stand to gain. Here are some benefits of having this policy: 

Increase employee satisfaction

A voluntary time off policy empowers employees to manage their own work-life balance. It also signals that the organization trusts This can lead to increased satisfaction, a result of feeling free to handle personal issues without worrying about how it would affect their work efficiency. 

Reduce absenteeism

With voluntary time off policies, employees can take time off whenever necessary. This helps reduce absenteeism brought on by personal problems, stress, or burnout. With these issues handled, employees can focus on work at hand and work more productively. 

Improve employee retention

Employee retention is also an advantage of VTO, meaning employees are likely to have a stronger sense of loyalty and dedication when they perceive employers are prioritizing their needs. Policies like this can help to reduce attrition and retain employees, as they are less likely to look for other employment options. 

Save cost

VTO policies can help organizations save money on labor expenses by reducing the need for overtime, temporary labor, and other expensive measures.

Provide flexibility for employees

Voluntary time off policies give employees the freedom to manage their personal and professional responsibilities, which lowers stress and improves employees’ general well-being giving space for employee promotion. 

Things to Consider When Implementing a VTO Policy

When introducing a voluntary time off policy in your organization; here are some of the key things to keep in mind: 

Clearly define guidelines and criteria

You should establish a clear understanding of what constitutes a valid reason for taking VTO and set specific guidelines for eligibility, duration, and notice periods. This will help prevent confusion for employees, employers and other stakeholders while ensuring consistency.

Review staffing needs

Assessing and understanding your organization’s staffing requirements can help to ensure that your VTO policy won’t compromise critical operations or leave you short-staffed during peak periods. 

Ensure fairness and transparency

For a fair and transparent process, approving voluntary time off requests will require guidelines to avoid favoritism or unconscious bias. Also, as an employer, you’re required to clearly communicate these criteria to all employees and ensure that the team managers are trained to handle these leave management requests.

Communicate the policy

Communicate the guidelines clearly, especially if it’s your first time introducing the voluntary time off policy. Some effective ways to communicate to employees is through employee handbooks, work reviews, company intranet and newsletters. Explicitly state the purpose of the policy, as well as the criteria and expectations. You should also address questions or concerns and provide support to ensure a smooth adoption.

Implement controls for abuse

No matter how good a VTO policy is, there is a chance that employees will abuse it. That’s why it’s important to establish measures to prevent this. These measures could include monitoring usage patterns, setting reasonable limits, and addressing any misuse promptly. This will help maintain the integrity of the policy and prevent negative impacts in the long run.

Build a Flexible Workforce with Omni

Leave management systems offer a practical solution to reducing administrative work and streamlining People management processes. 

Omni’s time off management capabilities help managers and HR teams swiftly navigate employee leave management. Omni’s platform allows you to approve leave applications on the go and keep track of who’s in and out of the office with at-a-glance scheduling. 

Our employee self-service portal empowers employees to submit their time off requests, which automatically routes to the appropriate manager thanks to customizable approval workflows. With automated calculations, employees and managers can easily view leave balances in real-time, and track how many vacation days they have left without having to go through HR. 

Our localized solutions and inter-connected system integrates your leave management efforts with payroll processing, facilitating automatic, accurate calculations and compliance with local regulations for various regions. 

Not ready to switch to an automated system? Download our free Employee Time Off Request Form template to help streamline your manual system.