How Much Would You Pay for More Time Off?

Eddie Braverman's picture
Rank: The Pro | 21,180

There is a new trend in human resources developing in corporate America. More and more companies are allowing employees to sell their unused vacation time, but some are even allowing employees to buy more vacation time - in some cases from the employees selling theirs.

This got me thinking: how much would you pay for more time off in banking? We all know the hours are brutal, and it would be great to get an extended break once in awhile that didn't require your hospitalization or the faked death of a relative. On one hand, it would be pretty easy to take your all-in comp and divide that by the number of days you worked in the previous year and set the rate that way. But it really comes down to the value you provide to your company, which is really much more subjective.

Let's say for the sake of simplicity that you worked 300 days last year and that your all-in comp was $120,000. Based on that, you made $400 a day. Would a day off be worth $800 to you? I'm making the assumption that the minimum you'd have to pay for a day off was $400 and that said day off would be unpaid leave, hence the $400 you wouldn't earn that day.

But then you have to stop and think: if the bank is paying you $400 a day, it's because they're making at least $500 a day from your efforts. Let's face it: we don't work for non-profit organizations. So maybe your bank would charge you $500 or more for a day off. What if your best friend's bachelor party is coming up and it's a 4-day Vegas bro-out over a weekend your group has an active deal working. Is it worth another couple grand to be poolside at the Tropicana to you?

It's an interesting thought exercise for a couple of reasons. First, it makes you consider what you're actually worth to your employer. Second, it gives you a solid idea of how much you value your off time. It's one thing to bitch about never having any time off; it's another thing entirely to put your money where your mouth is and stroke a check for some precious "me" time.

Not that a bank would ever make something like this available to employees. There's too much opportunity for arbitrage, when you think about it. Guys on the floor would start selling time off futures, thus enabling savvy investors to duck out of the shittiest work weekends. Plus there's the obvious talent gaps something like this could leave.

But I know that I had days I would've paid $500 to get out of. Or double that. Easy. I've had days I was so hungover I'd have paid a couple grand just to go sleep it off.

What about you guys? What's a day off worth to you? Assume there were no repercussions for taking the time off; that once you paid for it you got it no strings attached. How much would you pay for a single day off? What about a long weekend when your group is buried in work?

Comments (22)

Jun 10, 2013

Backward bending supply curve of labour.

Jun 10, 2013

I'm worth $155 an hour according to my company, so at 100% utilization I guess I cost my firm $1,240 per day that I take off.

Interesting, never thought about it in those terms.

Jun 10, 2013

While an interesting idea, I have to bring up the point that your simplification of the numbers far dwarfs the actual costs of an employee cost. While wages make up a majority percentage when you look at just the employee, they make up a minority cost when you look at the big picture. Look at it this way. If your group is working on an active deal that has a deadline. Lets say you make $500 a day in wages. You also cost the company at least roughly $150 in various other perks and incentives such as insurance, food services, gym fees ect. Now you move onto the hard fixed costs of an employee such as the rent involved with their sqft, their equipment costs, services such as internet, telephone, Bloomberg terminal, data feeds. So lets say for easy numbers sake you now cost the firm $1000 dollars a day. This is their hard line cost, now to figure in your cost we need to know the firms profit margin on the deal in which you are working lets assume 25%. Therefore your day off should in theory cost you $1250. However we have a deadline looming, what are the fees that are placed on late delivery? This is a wild card that could have drastic impact on your cost of a day off. Not to mention if they could bring in a temp to do your work how that would drive the number up as well. The fact of the matter is that your vacation days cost the company a lot more than just the amount they have to pay you for not being at work that day.

The idea that you can buy days off is interesting however it is really quite difficult to put a price on that day off as there are so many unique factors that must be taken into account for each circumstance that it would be extremely difficult to make an industry standard let alone a standard for the entire working population.

Follow the shit your fellow monkeys say @shitWSOsays

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Jun 10, 2013

@heister It's definitely a lot easier to calculate for somebody cranking out widgets on an assembly line than it is for most white collar service-oriented employees.

Jun 10, 2013
Edmundo Braverman:

@heister It's definitely a lot easier to calculate for somebody cranking out widgets on an assembly line than it is for most white collar service-oriented employees.

Again it is in theory, we loose x widgets so you have to give up your pay on x widgets. But again you have machine down time, disruptions to the rest of the work flow, temp or OT fill in to keep the production up. You have similar numbers of other costs associated with office and production line costs just the magnitude is different or similar depending on how complex the production line is.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Jun 10, 2013

My firm lets me buy an extra 5 days a year of holiday at my (i.e. not my charge-out) rate of pay.

Jun 10, 2013

I believe a better question is "how much would you pay for ANY time off." We get plenty of vacation days but its pretty much understood that you don't take them (outside of regulatory 5-day in a row mandatory per year).

Jun 10, 2013
brownbear1257:

I believe a better question is "how much would you pay for ANY time off." We get plenty of vacation days but its pretty much understood that you don't take them (outside of regulatory 5-day in a row mandatory per year).

Do mandatory regulatory days off exist for IBD as well? (i.e. in addition to S&T.)

Jun 10, 2013

Not anywhere that I am aware of, I would echo brownbear's comment. The firms that I have been with tacitly discourage even taking vacation. At the end of the year, they say you should use a couple days because you are just going to lose them, but when anyone at the lower level actually takes a day off they get upset about it. Plus, anytime I have tried to take a vacation, I have gotten slammed with work that requires me to be in the office.

Jun 10, 2013

Anyone serious about this should consider moving to Europe. Everyone in this country gets a half day every Friday plus at least 30 days vacation a year. And you can take more unpaid if you want.

That's before the 7 weeks of paid paternity leave, etc, etc.

Long weekends in Italy never get old.

Jun 10, 2013

When I worked in Big 4 my firm did this, I never used it but knew people who did and felt it was totally "worth it." I think if it fights off burnout from your job and helps you stick it out longer, then it's worth it.

I was under the impression bankers technically got a good amount of PTO days, even if you won't realistically use them all.

Jun 10, 2013

There's a pretty close to 0% I would ever do this in advance of a date, however, if I could do this pro-rated on any given day there is a great chance I would use it often. Noon rolls around and it's sunny and 80 degrees? I am out of here to go play golf guilt free (wouldn't let the gf know I skipped out on work, i'd be home about the same time as when I would normally get home from work). I'm thinking for the half day off I'd pay $150 or so + greens fees.

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Jun 10, 2013

I've been thinking about this lately. People complain that they don't have enough "vacation days," but when I was working at a restaurant, that whole concept was completely foreign to me to begin with.

If I didn't work, I wouldn't get paid, but who cares? If I wanted to take a couple days off, I wouldn't expect to be paid for not being there.

Jun 10, 2013

I buy an extra week every year, it ends up costing the equivalent of 1 week pay...however it gets taken out on a monthly basis and is pre tax

I eat success for breakfast...with skim milk

Jun 10, 2013

Some consulting firms let you work 9 month out of the year (+ pro rated add'l vacation) and take a pay cut of around 25-30%. Worth it when you consider they could bill you out for 2-4k a day. Firm loses revenue opp but get retention in long run.

Jun 10, 2013

I have long been a proponent of permanent three-day weekends. Everyone would be happier and probably more productive with their actual time at work.

Jun 10, 2013
TheKing:

I have long been a proponent of permanent three-day weekends. Everyone would be happier and probably more productive with their actual time at work.

This.

Jun 11, 2013
TheKing:

I have long been a proponent of permanent three-day weekends. Everyone would be happier and probably more productive with their actual time at work.

This actually got popular for a little while with a lot of companies. They'd give employees the option to work four 10-hour days instead of five 8-hour days. Sadly, overtime laws forced most of them to stop.

Jun 10, 2013

It's posts like this, I'm glad I'm not working in the US. My firm lets me buy 5 days on top of my normal 25 + 8 public holiday amount. And this doesn't even cover time on the bench between projects.

Jun 10, 2013

Man, would hate to get this question in an interview...

Metal. Music. Life. www.headofmetal.com

Jun 11, 2013
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