US firms are embracing an unusual “buy-sell” program for employees to trade their vacation days for cash – or vice versa.
It’s often this time of year that separates the vacation haves and have nots in the office: the haves never seem to use theirs up despite HR’s reminders, while the have nots have used every day available – and are asking about unpaid leave.
What if both groups could come out ahead in this scenario? If the vacation-rich would rather have money than time, could the vacation-poor buy their leave? While there are legal ramifications for trading away your workers’ minimum leave, if employees are entitled to above that minimum this program could be a retention tool.
San Antonio-based financial services provider USAA has been offering the program since 2005, with the proportion of employees getting involved growing every year. SVP of employee benefits Jeff Weiss said 41% of employees bought extra vacation time last October for use this year, up from 38% in 2008. The proportion of those selling time has remained steady between 11% and 12%.
Many employees buy time to tend to personal obligations, like a wedding, birth of a child or a family reunion, he said. The vast majority of workers buy vacation in a one-week chunk (the maximum is one week) while selling individual days.
USG Corp., a Chicago-based manufacturer of building materials with 8,700 employees, introduced a buy-sell program for employees nearly two decades ago. The program became so popular that management had to scale back the maximum vacation purchase to one week, from two, says senior vice president of human resources Brian Cook.
See also: HRM TV: How to manage summer vacation demand
Now, about half of employees buy one week of vacation every year – a cost that is then deducted in installments from the worker’s paycheck. Selling vacation time is considerably less popular, with less than 10% of the workforce taking advantage of this option, he says.
“People are obviously wanting to spend more time at home with families,” Cook says.
Would you be more likely to buy more vacation or sell off your unused days? Could this tool work for your company?