Why more global organisations are introducing holiday purchase as part of their flexible benefits package 

As the summer holidays are well and truly here, there’s no better time to think about introducing holiday purchase for your next benefits enrolment window.  

Holiday purchase has been a popular benefit in the UK for some time – 69% of our UK customers offer holiday purchase to their employees. And at Benefex, we give employees the option to buy or sell up to 5 days of holiday per year; take-up has been high with 25% of our employees purchasing additional holiday days in the last 12 months. 

Recently, we’ve noticed a growing trend of customers looking to rollout holiday purchase globally. Indeed, 32% of our global customers now offer holiday purchase as a benefit.  

Why should you introduce a holiday purchase benefit?  

      1. Support employee wellbeing  

Our 2023 Evolution research surveyed over 2,000 global employees and highlighted that wellbeing is still topping the employee agenda; 64% of employees said that a commitment to employee wellbeing is the most important factor when choosing an employer. And 57% of employees said that benefits that support their wellbeing have the greatest impact on their employee experience. 

Additional time off from work has an obvious positive impact on physical and emotional wellbeing – helping employees combat burnout, achieve a better work/life balance, and spend more time with the people that matter most to them. It also lets employees who care for children or elderly relatives take some extra days for those responsibilities. 

The health benefits of holidays have been well documented; vacation time reduces stress, improves heart health, and reduces the risk of a myriad of other health problems. So encouraging employees to take more and regular time off not only benefits their wellbeing, but can help reduce sickness, improve productivity, and have a positive impact on the bottom line.  

       2. Build a positive culture 

Some of our customers face challenges encouraging employees to use their annual leave allowance, particularly in the US. To combat this, the majority of our customers only offer holiday purchase, with no option to sell annual leave. If you’re unsure whether you should implement both, getting feedback from employees is a good starting point.  

Introducing a holiday purchase benefit helps create a positive and healthy culture, that’s supportive of taking a break, and shows employees that their organisation cares about their wellbeing and work/life balance. At Benefex, we give employees the option to trade five holiday days, as well as their birthday off and two ‘time for you’ wellbeing half days on top of their standard entitlement – our flexibility-first approach helped us win a spot on the Sunday Times Best Places to Work list as a top 10 big employer in the UK.  

     3. Introduce flexibility, with no additional cost to the business 

At a time when many benefits/reward budgets are being squeezed, and employee expectations are rising (52% of employees report that their expectations around benefits provision have risen over the last 12 months), holiday purchase can be a great way to provide benefits flexibility. As a salary sacrifice benefit, it’s cost neutral for employers – and can also have tax saving implications for both employees and employers, a win-win!  

In countries where local benefit options are limited and the talent market is competitive, many of our customers are using holiday purchase benefits to attract and retain the younger workforce, and to differentiate their EVP. 
 

5 considerations when rolling out holiday purchase as part of your global benefits strategy  

     1. Tailor your strategy to local requirements 

For example, in France, unused time off can be transferred into an employee’s PEE (company savings plan) via a TSA (time savings account) – allowing employees to accumulate paid leave entitlements or receive renumeration in exchange for holiday days they’ve not taken. Where this is the case, organisations may wish to limit the time that can be bought and how it’s used.  

Statutory holiday entitlement differs around the world, sometimes based on employment history; your benefits consultant can help you tailor your strategy for each region. For example, holiday purchase may not be the right benefit to introduce where the leave entitlement you offer is already much higher than the local average.  

     2. Secure buy-in from key stakeholders 

In organisations where there’s hesitancy about offering additional holiday to employees, running a pilot programme can help prove the business case. Some of our customers have started with a maximum of three days available to purchase; after a year, a review will show how popular the benefit has been and provide feedback to business leaders.  

For Benefex customers, we run post-enrolment surveys so employees can have their say on the benefits experience, including what benefits they value most, and how they’ve used their benefits – helping reward and benefits leaders evolve their strategies.  

     3. Communicate the benefit clearly 

As with any new employee benefit you’re introducing for employees, clear and effective communication is essential to ensure employees know what’s available, what the rules are, and how they can make their selections. Too often employers find take-up of holiday purchase is lower than expected due to ineffective communication, and the resulting lack of awareness. We recommend sending a reminder ahead of the benefits enrolment window so that employees can spread the cost throughout the year.  

If you offer travel insurance or a discounts platform that provides savings across flights, hotels, parking and hire cars, think about communicating these alongside the holiday purchase benefit to show the value of everything you’re offering employees to support their vacation time.  

     4. Consider offering holiday purchase in conjunction with a flex fund 

Although most customers offer holiday as a benefit for employees to purchase via salary sacrifice, we’ve seen a few instances where customers provide flex credits or flex funds which employees can use towards any flexible benefits – including holiday purchase.  

Flex funds are growing in popularity in regions where local benefits options are limited, or to enable employees to spend on benefits they might not otherwise afford/prioritise; allowing employees to use flex funds to purchase additional holiday gives them greater benefits flexibility.  

     5. Get the right technology in place  

As well as making the selection process quick and straightforward for employees, using a global benefits platform to administer holiday purchase reduces administration for HR and benefits teams, as much of the process can be automated. And the ability to report on holiday purchase take-up across each location, and the organisation as a whole, will help you continue to evolve and optimise your benefits strategy.  

Take a look at our Global benefits tech guide to find out more about how the right technology can support your global benefits rollout.