A new trend in vacation policies sounds great for employees, but could mean just another administrative headache for Finance staffers.
A small — but growing — number of employers are letting their workers buy, sell and donate vacation time.
The move is yet another example of the trend of increased flexibility in the workplace. After all, since vacation time is such a sought-after workplace perk, why not give workers the opportunity to get more of it?
These types of vacation policies are offered by “more forward-thinking or flexible-type employers,” says International Foundation of Employee Benefit Plans research director Julie Stich, because, “when times are a little tight, this benefit really doesn’t cost a lot of extra money to employers to provide.”
More common with PTO plans
Granted, these non-traditional vacation policies are far from commonplace. According to a recent SHRM study, just 9% of employers currently allow workers to cash out their unused vacation time. Another 5% allow staff to purchase additional vacation days through a payroll deduction, and 7% let workers donate their vacation time to a general pool that can be used by their co-workers.
However, flexible vacation policies are far more common among firms that already have paid time off (PTO) plans — which combine vacation, sick and personal time into a single bank — in place.
The SHRM study found that 52% of businesses currently offer PTO, and of those firms, 19% allow workers to cash-out their time and 15% offered a PTO donation program.
It’s worth noting that 1% of firms actually offer their employees unlimited vacation time.
How much extra work?
When it comes to purchasing vacation time, most companies require employees to decide whether they want to do so during open enrollment. And the cost is generally one week of the employee’s salary prorated over the course of the year for an extra week of time.
USG Corp., a Chicago-based construction company, is an example of a company that offers a flexible vacation policy. At USG, workers can buy or sell up to a week of vacation each year.
Of the company’s 9,000 employees, more than half normally purchase an extra week each year, and 5% sell the time.
OK, that all sounds great. But you know who’s going to be faced with keeping track of all this horsetrading back and forth. Think you’re prepared to set up a system to handle all this new administrivia?
