An employer suspected that some employees were using a time-off program as a retirement savings plan, eroding access to vacation and costing the organization money. Gallagher's proprietary data platform and analysis provided clear visualization of the issue and data to resolve the issue.
Challenge: Time-off program generates unintended results
- Aerospace industry.
- 90,000 employees.
- Many workers are reaching retirement age; a skills shortage could threaten productivity and efficiency.
- Talent attraction and retention are critical to supporting the growth strategy.
- Employees aren't using the PTO they've earned to support physical and emotional wellbeing.
- Leaders consulted with Gallagher to understand the situation and to reduce accrued time-off balance costs.
Anecdotal evidence suggested to organization leaders that some employees were using one of the time-off programs as a retirement savings plan. Such a practice by employees can erode access to much-needed time away from work, as well as cost the employer significant dollars in accrued time-off balances. Leaders felt they weren't getting the return they wanted on their compensation and benefits investment.
Leaders needed data to quantify the issue to generate actionable information and to support the employer's value proposition. Further, leaders needed to address the cultural aspect behind why employers may not be using their time off.
Solution: Better visualization for issue assessment and analysis
Gallagher's proprietary data platform and experienced analysis provided clear visualization of the issue. Data revealed that the Baby Boomer and Generation X groups of employees had accrued the largest average paid time off (PTO) balances at 171.6 hours. Further, these groups showed a higher-than-average number of 401(k) loans, at 65.6 hours. The average balance of accrued PTO time equaled about 680 days. The Gallagher team helped to quantify the cost of this activity to the employer, which underscored the need to take action.
Result: Cost avoidance and confident positioning for growth
The Gallagher team examined actual account balance and time-off use across a generational analysis to inform plan design changes. The employer revised the time off policy to restrict the accumulation of hours. Additionally, the employer brought in money coaches as internal financial wellbeing education for employees.