Ohio’s 12th largest employer overall of more than 14,000 people
Premier Health reintroduced at the end of May 2013 a voluntary time off program for salary employees. Eligible staff can take up to 10 days off with no pay a year in addition to their vacation benefits, if they want to.
Based in Hamilton County and employs about 8,600 people in the Cincinnati-Dayton corridor
Butler County’s fourth largest employer of about 2,000 people
The General Electric Co. is Ohio’s largest manufacturing employer
GE offers a “Voluntary Vacation Purchase” program. GE salaried employees can “purchase” one additional week of vacation time, up to five days, in a year
While the federal government imposes forced furloughs on its work force as part of budget cuts, some of the region’s other largest employers, including Premier Health and GE Aviation, offer employees voluntary time off, unpaid.
And the voluntary unpaid programs are popular, said officials with Dayton-based Premier Health, parent system of Middletown’s Atrium Medical Center, and Evendale-based GE Aviation.
Premier is Ohio’s overall 12th largest employer of about 14,000 people. Wright-Patterson Air Force Base in Greene County is Ohio’s largest single site employer of 29,600 military and civilian personnel, based on the most recent estimates.
Premier Health reintroduced at the end of May a voluntary time off program for salary employees, said Bill Linesch, chief human resource officer of Premier Health. Eligible staff can take up to 10 days off with no pay a year in addition to their vacation benefits.
GE Aviation manufactures commercial and military jet engines, as well as other plane components. The company is based in Hamilton County, but has a supply chain up and down the Interstate 75 corridor, employing approximately 8,600 in the Cincinnati-Dayton region. It is Ohio’s largest manufacturer by employment, according to the Ohio Development Services Agency.
The General Electric Co., of which GE Aviation is a subsidiary, piloted in 2009 a “Voluntary Vacation Purchase” program. It was expanded in 2010 due to its success to include all of GE Aviation, said spokesman Matt Benvie.
GE salaried employees can “purchase” one additional week of vacation time, up to five days, during the course of a year, Benvie said. The foregone pay or cost of those days is deducted on paychecks throughout the year and not all at one time.
In an environment nowadays where workers are almost constantly plugged-in to work, being able to take more time off can improve quality of life for those employees who can afford to take days off without pay, said Joshua Schwarz, Miami University professor of management.
“From the employer perspective, this policy is kind of like a voluntary furlough, where payroll costs are cut, but human capital is not lost and unemployment tax penalties are not incurred,” Schwarz said.
“If there is tight demand for those workers, employers can always deny employees’ request for time off. If there is slack demand, it could be in an employer’s interest to grant this leave as payroll costs are reduced,” Schwarz said.
Furloughs became more a part of everyday vocabulary after the economic downturn of 2007 to 2009.
Employers that offer these programs, voluntary or not, are doing so to cut costs, said Robert Miller, a member of the Society for Human Resource Management’s Labor Relations Special Expertise Panel. Wages and benefits are the biggest costs of doing business, Miller said.
A “furlough is unpaid time. You’re away from work,” Miller said. “Instead of laying everybody off, and you don’t have a job coming back, ‘we’re going to furlough you.’”
“Furlough in and of itself is not an evil thing. It’s a way to manage costs and expenses,” Miller said.
At Wright-Patterson Air Force Base, about 10,000 civil service employees have been furloughed with no choice for one day a week over 11 weeks. Employees on furlough have been prohibited to working no more 32 hours in a week, base officials have said.
The loss in payroll will have an estimated $40 million impact on the Miami Valley, according to base estimates. Furloughs, which started in July, are scheduled to end in September.
Employees originally faced 22-day furloughs, but the Pentagon slashed the number in half.
Nonprofit Premier Health, which operates four hospitals including Atrium, has about 2,000 salary staff who qualify to take extra paid time off, according to system officials.
“We’ve said to our management and our executive people if you would like to take some time off without pay, you can,” Linesch said.
“Actually it was a very popular employee benefit a couple of years ago,” when Premier offered it in 2010 at the height of the economic crunch, he said.
Health care in general has a very flexible work force. No matter what’s going on in the external economy, health systems like Premier are always adjusting hospital staffing to patient needs and volume, he said.
Voluntary time-off “gives us an opportunity to flex what is sometimes not a flexible workforce,” he said. “There is certainly some cost benefit to the organization.”
Cost pressures have grown on health organizations under federal health care reform. Key provisions of the Patient Protection and Affordable Care Act go in effect in 2014, increasing the number of people with insurance coverage and changing the way hospitals and other health providers are reimbursed for services. Health providers in the future will be paid based on meeting quality and outcome measures. Now pay is based on the volume of patients seen.
“We’re looking for ways to be flexible these days and probably a little more flexible than we had in the past,” Linesch said. Premier does not have “great expectations” for cost savings from the voluntary paid time off program, but “we’re looking for a million ways to save a dollar.”
GE Aviation said its voluntary vacation purchase program is a win-win situation for the company and employees, as the company reduces costs for the year and employees receive additional time off to relax, vacation, spend time with family or pursue hobbies, spokesman Matt Benvie said.
Both Premier and GE Aviation said the programs are most popular with newer employees that haven’t built up as much vacation time as employees who’ve worked with the companies longer.
“Although most of our young employees are from the Cincinnati area, many are not. I’m from Boston, so I don’t have a lot of vacation days to go home and see my family,” said Benvie, 27, who’s worked five years at GE. “For someone like me, it’s a great program, as it allows me to spread trips home throughout the course of the year.”
GE did not disclose the number of employees who’ve opted for the extra unpaid days, or the program’s cost savings.
Voluntary unpaid time off is not widely used in the U.S., based on research by the professional group Society for Human Resource Management. Eight percent of companies in 2009 offered a vacation purchase option. In 2013, 5 percent of companies offered it, showed results of the group’s annual employee benefits survey. Considering margin of error, the change over the last five years is about the same.
“Not very many companies offer that, so I can’t really say based on our data it’s a new trend. It’s an option that’s been around for at least five years,” said Evren Esen, the manager of the association’s survey research center
“It’s probably because it’s administratively a little difficult to keep track of,” Esen said. “If everyone took advantage of it, it could impact business operations as well.”
Staff writer Barrie Barber contributed to this report.