As U.S. and U.K. residents cope with the rising cost of living – with 16% of Americans saying they are struggling financially and 31% of Britons reporting working more hours or extra shifts – companies are signing up to platforms that make cashing out personal time off (PTO) quicker and easier.
Sorbet, for example, is a platform that lets employees sell their unused PTO back to their company. It claims employees use just 72% of their PTO days, and the benefits of a cash-out system are that it gives employees instant cash when they need it most while helping employers better track PTO usage and payouts. It has raised $21 million in investor funding since it launched in 2019.
Sorbet didn’t supply comments to WorkLife in time for publication, but CEO and co-founder, Veehtahl Eilat-Raichel, said in a statement, “A one-size-fits-all PTO plan is outdated and will not cut it anymore.”
PTO Exchange, meanwhile, has doubled the size of its business every year for the past three years, and is set to do the same this year. It allows employees to put the value of their unused PTO toward other needs, such as cash, retirement funds, student loans, offering days to a co-worker who’s sick or needs extra parental leave and more.
It has over 160,000 employees on the platform, ranging from Fortune 500 retailers with over 55,000 employees, to a 13-employee non-profit. To demonstrate the wide range of uses, CEO and co-founder Rob Whalen referenced an eldercare worker who cashed out her PTO last December to help buy gifts, and a retail cashier who paid off a $500 credit card debt by cashing out 35 hours of PTO. He also cited instances where people have donated PTO value toward needy causes, like a hurricane disaster fund, and a CEO who gave his time to workers who had to take time off during Covid.
Employer demand continues to grow, said Whalen, as a solution to the $65 billion worth of PTO allotted to staff a year that he claims U.S. employees don’t use.
“With the pandemic, The Great Resignation, the tight labor market, and now inflation, we have seen a tremendous amount of interest from employers trying to meet their employees’ diverse needs,” said Whalen.
Yet with parallel data suggesting that people still value work-life balance over salary – according to 67% of the 1,000 U.K. workers HR software provider CIPHR polled in May – are companies really acting in their employees’ best interests by facilitating – and even encouraging – PTO cash out?
PTO Exchange’s Whalen clarified that employers using the platform can “set up policies to support the behavior they would like to see in their employee community and culture”, for example, by limiting the amount of PTO that can be exchanged, or by requiring that employees’ take PTO before exchanging it for other benefits. Sorbet users also receive nudges to prompt them to take a vacation.
“Some argue that businesses should be tackling burnout, not encouraging it. Others believe that this is simply a legitimate way for companies to manage their PTO expenses. Ultimately, it’s up to each company to decide whether or not they want to partner with a platform like this,” said Meena Gupta, chief operating officer of NearbyMovers, a moving company comparison platform.
“However, there’s no doubt these types of platforms are here to stay and will only become more popular in the years to come,” added Gupta.
But if companies were genuine about addressing burnout, they’d lean more toward letting employees buy more leave, rather than incentivize the opposite, argued Bex Spiller, founder of the U.K.-based wellness platform, the Anti-Burnout Club.
The biggest danger, she warned, is destroying any kind of work-life balance. “We can often think it’s more productive to just keep going, but our bodies and minds need rest. It can help us feel less stressed, reduce the risk of burnout, and improve cognitive function. When we rest, we find it easier to concentrate and stay productive afterwards,” Spiller said.
“Not getting time to rest is only going to lead to a decline in cognitive function, concentration and productivity in the long run. It’s counterproductive. Eventually, this will lead to people taking more sick leave,” she added.
If not being able to afford bills and essential expenses is the reason people are sacrificing their PTO, this is a bigger problem employers need to provide more sensitive support towards, Spiller advised.
“If people are worried about affording the rising cost of living, then organizations need to look at the financial well-being of their employees and what they can do to improve this more than anything else,” she said.