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When Vacation Fund got started, founder Erica Pearson just wanted to help employees achieve their dreams outside of work. But when she started interviewing people, vacation kept coming up as something they wish they could do, but couldnโt. When pressed about why they couldnโt take vacation, Pearson said half didnโt have the money and half felt their employers wouldnโt support them.
On the employer side, the story was different. They needed employees to take vacation, otherwise they had a massive payroll liability from unused vacation theyโd need to pay out.
With feedback from employees, their target market, Pearson pivoted from achieving dreams to paying for vacations, and Vacation Fund was born.
Improving experiences
In the pivot from achieving dreams to planning vacations, the Vacation Fund team continued to do research on why companies would encourage employees to take time off. This was happening as more studies showed that taking vacation increased productivity. That โbusiness caseโ seemed secure, but as they did more research they found multiple other reasons. Many businesses feared payroll liability, but more so they had a different motivation: the war for talent.
โSome really want this as a recruitment strategy to say โweโre allocating money towards your vacations,โโ said Pearson, noting that vacation experiences are a key lifestyle trend among millennial talent, but they often canโt take vacations for many reasons.
On the employee side, this perk acts like additional income thatโs earmarked for vacation. They can request to withdraw their Vacation Fund, which is usually done through matching contributions from employers, at any time. While employers can choose withdrawal parameters, for example only for long vacations, the money is cash-on-hand for employees to use on their vacations.
The whole platform also provides aspirational elements, where people can document their dream vacation. You can think about locations, where you want to stay, and the kinds of experiences you want to have. Thereโs even the opportunity to think about โstaycationsโ where you use the money to treat yourself – without ever leaving the comforts of home.
โWe coordinate with the employer to make sure that these vacation days are actually being taken,โ said Pearson. โSo it can fund something during a staycation [or] it can fund a camping trip.โ
A platform play
At the beginning, many people considered Vacation Fund to be more of a feature than a stand alone platform. It seemed to fit nicely as a benefit that could be offered by employers, but would better fit as part of a benefits administration platform than a single product. Pearson thinks differently.
With vacations being such a fundamental part of the millennial generationโs life experience, Pearson sees a platform play at hand. Right now, the platform operates like a niche marketplace of sorts. Employers put money towards a vacation and employees can plan out their dream vacation within the Vacation Fund interface. But Pearson hopes to add a third dimension to create a true marketplace platform: hospitality and travel providers.
Since employees already can research and plan their dream vacations within the Vacation Fund interface, the company has what Pearson calls โlead [generation] goldโ for the travel industry. This provides an opportunity for Vacation Fund to own the entire employee-vacation-planning experience, from research to purchase, through the platform.
And travel may not be the only goal of Vacation Fund. Pearson already sees opportunities to move into other areas, since the fundamentals of the platform are transferable.
โWeโve gotten into a lot of employee financial wellness conversations,โ said Pearson. โSome people really want to use this to actually just save for a down payment on their house.โ
