“You see, in this world there’s two kinds of businesses, my friend: Those that offer PTO and those who don’t.”

The allocation of paid sick and vacation days for employees has long been a dilemma for employers and HR managers, especially when it comes to small businesses.

Many questions spring to mind when considering PTO such as, How many days do we give? Do they carry over from year to year? Should we replace sick and vacation time with a combined paid-time-off (PTO) bank? How much vacation time do we need to offer to attract new employees? And, how do we determine when employees abuse PTO?

The answers to these questions, of course, depends on a number of factors ranging from the size of your organization and the type of work being done, to the flexibility of a given department and the possibility of employees to work from home.

To begin breaking this down, let’s look at data provided by small business owners across the U.S., showing how they handle sick and vacation days.

• 30% offer less than five days.
• 16% offer exactly five days.
• 14% offer six-10 days.
• 32% offer no sick days, only paid time off.
• 9% offer unlimited sick days.

Many small business owners stated that having just one person out for more than a day can place a large strain on the entire company because they simply don’t have the numbers to accommodate an individual being out for an extended period of time. That would explain why 46% offer only five days or less of paid sick time.

Some workplaces however have acknowledged the many downsides of limiting paid sick time to their employees.  Between an increased cost of living, large student loan debts, and longer-than-usual recovery periods thank to our increased tolerance to antibiotics, employees have found themselves unable to afford taking “all the time they need” to fully recover when PTO is not offered, choosing instead to “tough it out,” which leads to more employees getting sick, missing work, and a decrease in overall productivity. To avoid this, one in 10 small business owners are now telling their employees, “Take as many paid sick days as needed.”

Increasingly popular, is the elimination of sick days in favor of a paid-time-off bank. No explanation necessary—if you can’t make it in, you can’t make it in; just mark it down as PTO. Some employers feel this limits confusion and avoids unnecessary excuses or made-up illnesses not to mention that employees enjoy the privacy this allows them to handle certain personal matters so they can come back to work focused and energized.

When it comes to vacation days, small business owners report the following:

• 46% offer less than 10 paid vacation days.
• 30% offer exactly 10 days.
• 17% offer 15 days.
• 8% offer more than 15 days.

The trend among smaller employers is clearly towards the lower end of the spectrum as an astounding 76% offer only 10 days or less of paid vacation time, sighting the difficulty in maintaining productivity in a small business environment when people are not working. This however may be the reason so many small businesses report high-turnover rates, difficulty attracting top talent, and other hiring challenges.

Small businesses can try and counter these challenges by offering employees more flexibility including options to work from home or the option to leave early for personal and family obligations. Productivity may also pose an issue though as employees do still need an opportunity to get away, recharge and unwind.

So, to PTO or not to PTO, that is the question. ‘Tis nobler to give employees paid time off to recover and recharge? Or, to continue down the course of strict sick and vacation day policies, while trying desperately to over-compensate with other benefits.

Keep in mind that employers who are able to provide more generous paid leave benefits have found that doing so yields better talent, productivity, and dividends in the long run.