Time is money when vacation's for sale
A little flexibility proves a benefit for workers, employers
Monday, January 7, 2013
At year's end, vacation days can be a source of stress. Many employees wish they could get more time away from the office; others watch unused vacation days go to waste.
Some employers allow workers to buy or sell vacation days or paid time off. It's a way to offer a benefit that costs the company little but may help attract and retain employees.
Employers who offer it say it gives people the flexibility they need to manage their lives.
Stacey Rodriguez at Atlanta-based AGL Resources buys an extra week of vacation every year. She started buying the extra week when she joined the company at age 25. "I thought it was great," she said. "Now, I get four weeks (of vacation), but I still buy an extra week," said Rodriguez, 46, who uses the extra time to visit family in Tampa.
A 2010 survey of employers by consulting firm Mercer found that 14 percent of respondents allowed employees to buy or sell vacation days. About 9 percent allowed the option to sell, while 7 percent offered the option to buy, the survey found. Buy and sell provisions are slightly more common in paid time off plans that combine sick time and vacation time, as compared with vacation-only plans.
A survey conducted by Harris Interactive for destination club Inspirato found that one-tenth of employees who get vacation time from their employer would prefer more time off over a higher salary or promotion.
Natural-gas distributor AGL Resources has long offered the option for nonunion employees to buy up to five additional vacation days at their pay rate during open enrollment for benefits. The price is deducted from the employees' paychecks spread out over the entire year. If they don't
use those days by the end of the year, the company will refund their contribution. About 30 percent of eligible employees buy extra vacation days.
One challenge for employers is tracking the time bought and sold, said Julie Stich, director of research at the International Foundation of Employee Benefit Plans. But for firms that value flexibility for workers, "it's definitely a benefit that may fit your company culture," she said.
Because refunding unused vacation days from an extra week results in a payout near the end of the year, some employees at AGL Resources use it like a Christmas savings account. Others whose employers allow them to sell some of their regular vacation time also use the extra cash for the holidays.
"It's a popular benefit," said spokesman Bob Williams at building materials company USG Corp. The company has offered the benefit since the mid-1980s, and about 53 percent buy an extra week, while about 5 percent sell a week to the company.
Buying or selling days off may be less important to employers that allow workers to roll over unused vacation time, but allowing employees to sell vacation days can help other companies cope with the challenges of trying to get more work done with fewer people.
"Some employers, when it comes to the year-end, have a difficult time letting people take time off," particularly at places like hospitals, said Alan Dale, a principal in Mercer's health and benefits practice. "So they offer the sell option because they know they can't let employees take that time off."