* Effectively manage PTO.

Controlling and understanding PTO expense allows you to recruit better talent. You can promise people more vacation than your competitors if you know that it's controllable. This tips the balance in your favor, allowing you to build a better team. It’s another way to win.

The first issue businesses need to address when creating their PTO plan is what to do about employees who quit or are terminated. Many states require that the balance of vacation pay be paid when an employee leaves the firm unless the company has a policy that states otherwise. If you choose to disallow vacation time to resigning employees and you run a company of high turnover—a fact of life in certain industries, like retail or food service—this allows you to reallocate the PTO that those who leave might have used in favor of those who stick around. In essence, you can offer more generous PTO packages when recruiting than your more lenient competitors can offer, at no additional cost. Considering the fact that employees deserve benefits commensurate with their loyalty, it is also arguably more ethical.

According to a recent Expedia.com study on U.S. vacation habits, in 2002, a typical American was granted 16 vacation days, but only took 14 days off. Consequently, American workers handed back over $21 billion in unused vacation days to employers that year. So be generous when you hire. They probably won’t use it all anyway.

Curt is the CEO of Journyx in Austin, TX.