What Does Work-Life Balance Have to Do With the Balance Sheet?
“Burnout” is now officially recognized by the World Health Organization (WHO). Get the inside scoop from Sorbet Co-founder & CEO, Veetahl, on why it’s time for companies to proactively address this rapidly evolving workplace phenomenon.
Table of contents:
What is the work-life balance (sheet) problem?
Evidently the personal band-aid solutions like office yoga and breathing techniques may be harming, rather than helping, as the percentage of burned out employees has increased from 43% pre-Covid to 52% in 2021. As of February 2021, Millennials (59%), Gen Z (58%), and Gen X (54%) shared similar burnout rates, while rates as high as 50% among medical residents and 85% among financial professionals were recorded.
But why should the responsibility for managing financial and emotional wellbeing move away from the individual and towards the organization?
This summer, our very own Co-founder & CEO, Veetahl, took to the stage at Collision(more than once) to address this very issue, discussing topics like, "Time is money. Spend it." and "Using technology to make employees happier". (Led by Senior Correspondent at @Business Insider, Rebecca M. Knight, alongside @Drift co-founder and CEO, David Cancel).
CFOs and HR take note: It’s now on you to think innovatively about what your company can offer employees to maintain a healthy work-life balance. But how does this affect the balance sheet? When Stanford researchers studied the link between work-life balance and health costs in the U.S, they found that workplace stress cost the global workforce an estimated $1 trillion in lost productivity each year.
Workplace stress is estimated to cost the U.S. economy more than $500 billion dollars, and, each year, 550 million work days are lost due to workplace stress. A study by the American Psychological Association (APA) claims that burned-out employees are 63% more likely to take a sick day and 2.6 times more likely to be actively seeking alternative employment.
On a company level, those organizations without robust wellbeing systems in place
have higher healthcare costs, lower productivity and higher turnover according to the APA.
How can companies use technology to make employees happier?
When it comes to employee wellbeing, technology can be a double-edged sword. Although it has made work-life more streamlined, it has also created an ‘always on’ work culture.
However, if done right, technology, alongside hybrid working models, can facilitate greater employee happiness in the workspace because it enables workers to have greater flexibility between professional and personal domains. In order for employers to keep their workforce happy and engaged, it is essential to introduce new technologies. A recent study by Bluewater found that nearly 25% of employees would consider switching to companies that met their technology needs more successfully.
However our unlimited access to smartphones and various tablets mean employees can find themselves working outside of their regular working hours. Employers must take more responsibility to help employees establish a realistic work/life balance with clear boundaries so that employees take the time to rest and recharge.
How taking PTO can be the answer employers and employees have been looking for
When trying to solve the work-life balance problem while improving company and employee financial wellbeing, CFOs have long overlooked a HUGE blindspot. Spoiler alert: it’s all about PTO and why companies should #sayNOtounlimitedPTO.
While wages for frontline workers have increased at their fastest pace in years as a result of current U.S labor shortages, inflation remains stubbornly high in the United States. Currently wage inflation rates remain less than half the current rate of inflation. This means that workers' take-home pay is shrinking, and with 2% less buying power, who can afford to take a vacation?
However, it has never been more important to take PTO from a financial and wellbeing perspective for both employers and employees, especially amid fears of a looming recession. Those employees who haven’t taken time off since the beginning of the year are leaving OVER $2,000 on the table! How so? Employers pay employees to work X amount of days & X amount of days NOT to work. Employees are actually paid NOT to work. It’s part of their contract. In some countries it’s the law. So when employees don’t take time off, they actually work EXTRA days - UNPAID!
Fun fact: An average employee holds over $3,000 in unused vacation days so use your PTO!
For employees who have unlimited PTO, the loss is even greater. At first glance, unlimited time-off seems like an undeniable perk but a recent study by Namely shows that employees with unlimited PTO actually take off, on average, 30% less days than employees with an allocation of PTO. So they actually WORK MORE, and EARN LESS than peers with limited PTO policies. Plus employees aren’t eligible to be compensated for any unused vacation days which is essentially hundreds of dollars down the drain!
How do companies benefit when their employees take PTO?
On average, employees in the US use only 72% of their paid time off. When employees don’t take time off it accrues, creating an unpredictable liability on the company’s balance sheet. This has resulted in over $300B in annual accrued PTO liabilities in the US. If employees have accrued a significant amount of PTO, employers are often faced with unexpected, expensive payouts that balloon by 6%-10% annually due to wage inflation.
How Sorbet provides a win-win PTO solution to improve work-life balance while saving the company money
Sorbet’s solution allows employees to exchange unusable portions of their PTO for cash and refinances the liability for employers. Employees can cash out unusable PTO to use anytime, anywhere or access exclusive travel & wellness offers just for Sorbet users via their Sorbet app or mobile website. This unique benefit enables employees to gain visibility of their PTO usage and receive personalized alerts & reminders when it’s time to take time off.
Companies using Sorbet can remove PTO liabilities from the balance sheet by turning an unpredictable liability into a predictable payment. This ensures greater control and predictability of cash flow which allows CFOs to forecast finances more accurately which is particularly important in today's economic climate, given the current financial downturn.
During this period when mortgages, gas prices and the general cost of living are sky high, giving employees the choice and freedom to use their PTO in a way that works for them provides real added value, financially and emotionally.
Understanding how to provide employees with additional financial benefits can literally be one of the most important ways to improve work-life balance and recession-proof businesses, enabling CFOs to manage the balance sheet in an economic uncertainty.
Want to learn more? Get the full scoop on how Sorbet can make employees feel happier and more included in the workplace.