Employees sell holiday to boost recession pay

Holiday trading options increase by 20% from 08 to 09
Pensions remain the most popular benefit

New research from leading employee risk and benefits management firm, Aon Consulting, finds that employees are increasingly selling off their holiday allowance to boost their salary. The study also reveals a significant reduction in the take-up of well being initiatives through flexible employee benefits.

Flexible Benefits enable employers to allow their workforce to select from a choice of benefits that suit them. The 2009 Aon Flex Tracker is based on companies ranging from 100 - 10,000 employees across all industry sectors. The Tracker measures and compares the take up in flexible benefits from 2008 to 2009 and ranks benefits in order of popularity.

This yearís tracker reveals that ëholiday trading,í whereby employees either buy or sell their allotted holiday allowance, has become an evermore popular option (take up increased by 21%). The proportion of staff selling holiday has nearly doubled from 20% selling off their holiday allowance in 2008 to 35% in 2009, suggesting that employees are seeking more ways to boost their salary in the recession.

Despite the increase in holiday selling, there were still significantly more people buying holiday than selling it, illustrating that for the majority of people, leisure time is highly valued.

Aligning with 2008 findings, the 09 Tracker finds that pensions remain the most popular benefit, with 78% of flex scheme members selecting the benefit, followed by private medical insurance (PMI) at 45% and then holiday trading at 21%.

Key findings

Charitable giving has continued with the increasing popularity of environmentally-based charities such as the Woodland Trust building on the success of more traditional charity-giving such as through the Charity Account operated by the Charities Aid Foundation.

There has been a growth in the voluntary insurance benefits including Personal Accident, Critical Illness and Travel Insurances during the year and less people have been changing their level of PHI cover.

Despite increasing travel costs the governmentís cycle to work scheme remains well down the list at a steady 1% take-up.

The recession has seen a reduction in the take-up of initiatives such as wellness/learning accounts which have now fallen out of the ìTop 15î benefits since 2008. E.g: take-up of Health Screenings on an un-funded basis has also fallen to a low of 0.5%.

Take up in the tax free Mobile Phones benefit has plummeted to 0.02% and resulted in a major provider pulling out of the market place in 2008.


Commenting on these findings, Gareth Ashley-Jones, Head of Flexible Benefits, Aon Consulting said:

ìAlthough more people are selling holiday in a bid to boost their income, buying additional holiday is still more popular demonstrating that ìleisure time ì is priceless to some extent.

ìGrowth in voluntary insurance benefits and less people changing their level of PHI cover could be due to the financial value provided to employees by way of group policies as well as due to the ease with which cover can be taken out through flexible benefits.

ìDespite the recession and increasing cost of travel, take up in the governmentís cycle to work scheme falls at the bottom of the list in popularity, this is thought to be due to continued lack of storage and showering/changing facilities in the workplace deterring employees.

ìThe other ìbig loserî is the tax free Mobile Phones benefit. It is thought that significant decline in take up of this has been hit by employeeís perception of this being a ëluxury itemí during the recession and by the pace of price and technology changes in the High Street which is consistently driving down costs and improving value.

ìIt is very noticeable that the balance that companies face between containing costs through robust benefits management and providing subsidised employee benefits to help aid recruitment and retention is entering a new phase. Cost control is paramount and this has resulted in companies scaling back provision of softer benefits and employees are now really valuing benefits that can save them money by utilising group rates or minimising National insurance Contributions.î