Welcome to the Use Case Podcast, episode 267. Today we’ll be talking to Veetahl from Sorbet about the use case or business case for why her customers choose Sorbet.

Sorbet empowers employees to instantly cash out their unused PTO and spend it on anything, while employers turn an enormous liability into a huge tax benefit that helps control cash flow and saves the company money.

Give the show a listen and please let me know what you think. Thanks, William.

Show length: 25 minutes


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Veetahl Eilat-Raichel
Co-Founder & CEO Sorbet Follow

Announcer (00:02):

Welcome to RecruitingDaily’s Use Case podcast. A show dedicated to the storytelling that happens or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better. As we speak with the brightest minds in recruitment in HR tech, that’s what we do. Here’s your host, William Tincup.


William Tincup (00:27):

Ladies and gentlemen, this is William Tincup and you’re listening to the Use Case podcast. Today, we have Veetahl on from Sorbet. And we’ll be learning about the business case, so the use case that are prospects and customers use to purchase Sorbet. So while we just do introductions, first, Veetahl, would you do us a favor and introduce both yourself and Sorbet?


Veetahl (00:45):

With pleasure, and thank you for having me. So I’m Veetahl, I’m the CEO and one of the co-founders of Sorbet. Sorbet is a relatively earlier stage company. We’ve been around just a little over two years. I come from predominantly a financial background, been in like multinational corporates my entire career. Never really thinking of becoming an entrepreneur until sometime in the middle of COVID. When I started to talk to many employers across the country and just repeatedly hearing in the most organic way, without specifically asking about this and without specifically researching this space, I just kept hearing from more and more people that they were very concerned about the fact that employees just stopped taking time off.

I stick you back to May or June of 2020. This was when there was shelter in place, travel restrictions, plus everyone transitioning to working from home. And just everyone just stopped, just stopped going on vacation. And so basically, as I kept hearing about this problem, I started researching this space. And I found like, that many, many things, COVID did not create this problem. If anything, it’s slightly accelerated an existing trend, which is that, way before COVID, US employees just don’t use up all of their vacation time.

In fact, on average pre-COVID, people use about 70 percent of their allocation of pay time off. And that creates a huge, huge market failure, both for employees and for employers. And it’s a very unique market failure where no one gains from this. It’s a pure lose-lose situation. And I’ll explain in a minute why that is, but as I was staring at this huge, massive problem, we saw a tremendous amount of value to unlock. And in fact, each year from year to year, there’s over 270 billion dollars of unused vacation days that get accumulated on company’s balance sheets. Which is compensations that employees could potentially receive, and employers are inflicted upon with as debt essentially. And so, we saw this massive problem and we saw an opportunity to really provide this value book to employees and employers. And this is how Sorbet essentially was.


William Tincup (03:15):

So quick question on the liability side. So it shows up on the balance sheet as a liability, but how do they treat it at the end of the year or reconciling the books for the next year? Do they just write that debt off?


Veetahl (03:29):

So approximately 70 percent of US employers don’t write that off. They–


William Tincup (03:34):



Veetahl (03:34):

They simply allow employees to accrue and carry it over year to year. Some of them would have an effective cap on how much you can carry over. Some of them will put an expiration date on how long you can carry it over. But the vast majority of them will allow you to carry it over. There is a smaller portion of employers that will apply a use it or lose it policy, whereby by the end of the year, if you didn’t use it, you essentially lose it. And then of course, a certain amount of companies that are now adopting discretionary or unlimited PTO, which is essentially this very cynical way of basically eliminating the problem for employers, but then not encouraging employees to take time off.


William Tincup (04:20):

I am absolutely with you. So with the unlimited PTO, and I love that you went there because I had this very experience built. In the odds, I had business that won best places to work. And one of the things we had was unlimited PTO. We had a bunch of crazy great benefits. Unlimited PTO was not one of them, because people were reluctant to take off. And years before that, we had major holidays and then three weeks or whatever it was, and we had it as the use it or lose it. And so people would take off, they’d take vacations, like, there was no guilt or shame or anxiety or any of that stuff. It was like, “Hey, yep, going to Cabo.”


Veetahl (05:07):

Wonder [inaudible 00:05:08]. I think that one of the things that you get, there’s enough data already to show, is that when employers apply an unlimited PTO policy, people take significantly less time off. And it has to do with a deeply rooted cultural reluctancy that we all have with the concept of taking a vacation. And when there is a set amount of time, there’s both a financial incentive by the employer to encourage you to do so, but also an increased awareness of your right and entitlement and eligibility to take it. Whereby with unlimited PTO, you just lose that legitimacy.


William Tincup (05:45):

So thankfully we’re akin because we both, I mean, again, it’s kind of a con, unlimited PTO. But after you get past the, it’s a shiny object and it looks nice, people just don’t use it. And again, I think what’s interesting about the moving the liability to the next year or years, even plural, is you’re still not really encouraging people to use it. You’re just kind of moving the liability from this year to the next year, to the next year, et cetera. But there’s really still not kind of a cultural part of that or an emotional part of that that says, we want you to actually, you’re better if you’re fully functioning. If you’re fully functioning, you need to actually go and regenerate and recuperate, et cetera. Like, that just makes sense to me. So how does Sorbet play into this role? So the problem is real, I can, you already nailed it and I can speak to it from personal experience. So now, how does Sorbet kind of interact with that problem?


Veetahl (06:50):

So in order for me to fully explain what Sorbet does. If you’ll bear with me for a few minutes, let me just explain for a second how PTO actually works and then it would be easier for me to explain what it is.

To fix it. So basically as an employee at a company, assuming that you do get an allocation of time off. Effectively, your salary represents a certain amount of days that you’re supposed to be working and then a certain amount of days that you’re paid not to work. Now it sounds really trivial, but if you think about it, it’s actually the most incredible benefit that our employer provides us. Quite possibly the most expensive benefit, but just something that people are just not as aware of. And just to put like a numbers example behind it, to make it a little bit more understandable. Say a person is eligible for 12 days off a year, on any given month, on an average month, you’re supposed to work for 19 days and then you get paid not to work one day.

Now, what happens when you don’t actually take this day off, is that for that particular month, you work 20 days, when you were actually effectively only paid for 19. So that means that you worked an extra day that isn’t reflected in your salary. So for that day, you haven’t been compensated yet. Your employer actually owes you this money.

Very often when I talk about this, and I ask people when I explain this, is so who gains from this, right? You’re automatically assuming that there’s some nefarious evil employer on the other side taking advantage. But the fact is, that when you don’t take that day, when you work that extra day, you’re actually forcing your employer to lend money from you, right?


William Tincup (08:35):

That’s right.


Veetahl (08:36):

You work that day, they haven’t paid you yet, so you lend them this money, they are immediately, they immediately have to recognize this as a liability towards you. And it’s the worst kind of liability. Because unlike a loan that you take from a bank, this is a liability that you didn’t ask for. It’s not part of some sophisticated financial planning. You never actually know when you’re going to have to pay it off, right? It’s not like when you take a loan usually, “No, okay, I have to pay this off in an X amount.”

You can literally wake up every single day, have an employee resign or have their direct manager fire them, and all of a sudden you have to pay this off. And worst of all, you don’t actually know how much it’s going to cost you. Because what a lot of really sophisticated CFOs don’t fully realize, is that it doesn’t matter how much the employee earned when they originally accrued this time, you paid them off according to their salary when they leave.

So the fact is that this is a loan, this is a liability that balloons from year to year compoundedly, with every single wage increase that you provide at some point. So taking you back from an employee’s perspective, a portion of your hard-earned compensation, this is not like a future bonus contingent upon some future. [Inaudible 00:10:02] your hard-earned compensation for work that you’ve already done, is locked up in an illiquid asset that you can’t access and then you don’t know when you’re going to access, if at all. And from an employer perspective, you can inflicted with this unpredictable ballooning liability that you didn’t ask for. What we do is actually quite simple. We integrate with the HR system, we analyze the data and we’re able to come back to the company and provide them on a per employee basis, our analysis and prediction on how much of that balance will actually get used versus the unusable portion of this PTO, which will end up just stuck on the balance sheet.

Then we’re able to provide each and every employee with the ability, for the first time ever, to actually cash this out now. Instead of having to wait until some unknown point in the future when they ultimately leave the company. The way that we do that is that we provide this cash for them. So all of a sudden, they have the ability to get an immediate infusion of cash, at a time where we can all use some extra cash, right? Everything is so expensive right now. And you’re now able to access an additional stash of compensation that you didn’t even know existed.

But at the same time, from an employer perspective, they no longer owe the employee because the employee has already been paid. Now, [inaudible 00:11:26] owe Sorbet. So now for the first time ever, they get to control and predict this cash payout. They can decide when they pay us back. So instead of this entirely unpredictable and very, very costly liability, we turn it into a very stable and predictable payment schedule to us, which is cost savings for them.


William Tincup (11:46):

And just so I’m, the audience is clear, is it, can they trade that for other day, for other services or for other things? Or is it cash for cash? Is it based–


Veetahl (11:56):

So we effectively turn it into cash, What we do is we load it onto a prepaid card. It’s a Visa prepaid card, you can use wherever Visa is accepted. So basically anywhere. But then we also proceed to start offering you really, really amazing kind of discounts and offers around travel and hospitality, and wellness, and even like, financial savings and things like that. But you don’t have to obviously spend it on our offering. It’s just our way to boost your cash out and your compensation and to help your dollar go a longer way. But we have users using this at gas stations, and grocery stores, and on Amazon and Starbucks as well.


William Tincup (12:36):

So I’ll start, Veetahl, by saying I despise software categories just in general, but HR budgets are built in Excel, generally speaking. So where do you find yourself in the budget process? ‘Cause I see, I could actually probably place you in about 10 different places, but I could also see you kind of in benefits, as an employee benefit. But before I lead the witness too far, where do clients, where are they pulling money to pay for Sorbet? What are they using? Where does that come out of the budget?


Veetahl (13:12):

So the beauty is, is that Sorbet has no implementation fees, no upfront fees, and no per employee per month fee. That’s not [inaudible 00:13:21] business model. So you don’t actually have to budget it. In fact, it’s a zero-risk solution, because if none of your employee sees value in this, no one cashes out, nothing happens, no skin off your back. Only if employees start using it, as our benefit that starts kicking in, which is that instead of that liability, you will see a reduction on liability for accrued employee benefits. You will start seeing a line item on the balance sheet, which is essentially a payable to us. And the financing that we would provide, i.e: the cost structure of paying us back is always guaranteed to be lower than the average wage increase of the company. So it’s actually cost saving instead of costing you anything.


William Tincup (14:12):

So what do people think of you as, like, if you’re talking to finance or HR, what do they, you’re kind of a platypus and a giraffe kind of together. But where do they put you? I’m really curious as to kind of how they categorize you.


Veetahl (14:31):

So we can either be positioned as an amazing, stunning, first of its kind, employee benefit that is also cost saving to the company. Or we can be positioned at this, as this amazing new innovative hack for the company, that also does really amazing things for your employees. And it really does depend on the needle moving KPIs of the company. It depends on what the priorities are for a company. So we would, if we go through finance, it would often be companies concerned about recession, wanting to have better control over cash flow, wanting better predictability and optimizing their balance sheet and obviously, cost saving. We will come to them saying, “Listen, you have this hidden gem on your balance sheet that you didn’t even know. Let us help you with all of that, and by the way, provide this incredible benefit to your employees.”

Conversely, we can come in through Comp & Vent or maybe HR and say, “Listen, we have this amazing benefit for your employees, but unlike a lot of the other benefits, your CFO is going to love this.” So that’s kind of the go-to market for us.


William Tincup (15:46):

I love that. I would rather see you as a benefit communicated by the employee communications people as a benefit and it truly is a benefit. But I understand companies would go about that a little bit differently, just depending on kind of their priorities as you said. Let’s do some buy side things real quick. What’s your favorite part of showing people Sorbet? What’s your kind of aha moment when you can actually get them into a demo? Again, whether or not it’s finance or accounting or HR, whomever’s on the other side of this, when you can get them to this place where, if I can get them there, you know they’re going to have an aha moment.


Veetahl (16:28):

So I have two favorite aha moments. One is that, the one thing that’s cool about our solution is that every single buyer or decision maker is also an employee, who also has a PTO balance, who also hasn’t taken a vacation in forever. So, this hits home in so many levels and they understand it both from their own specific personal perspective and the value that they will receive, but also from a more broader kind of employer perspective. And so, that’s always a really great moment when people start realizing on themselves, what would they do with all this money? And they start doing the back of the envelope calculation of how much they could actually get out of this. And think about this, their next really amazing vacation that they can now fund partially or fully from unused vacation days, so that’s one moment. And then the other thing is, that there’s something really poignant and amazing about the impact we’re actually seeing with the users that we have.

Very often, our users are lower wage earners, frontline workers. And for them getting access to a few hundred dollars each month of additional compensation is truly life changing. And we’re hearing these amazing stories of people who buy medicine, because they have access to Sorbet or get to spend more quality time with their kids, because they have that extra amount of money. Or they now have money to go out to lunch with coworkers, because up until now they couldn’t afford it. So things like that when you feel like you’re truly making an impact in people’s lives.


William Tincup (18:01):

I love that. So let’s do some, I know it’s early stage and in terms of only being alive for two years, but some customer stories without brand names. So what I’m really looking for is, you started a company and all of a sudden two years later, people are doing great things with Sorbet. Can you tell us some of those stories, without mentioning their names?


Veetahl (18:24):

Yeah, so one of my favorite stories is a user who told us that he was at a pharmacy late at night. And he had to drive awhile, because he lives in kind of a rural area. And he got to the pharmacy, he had to buy medication for his daughter. And all of a sudden, realized that he forgot his wallet and he was already fully prepared to drive an hour back home to go get their wallet. And he then realized that he can use Sorbet and use Sorbet at that moment.

Or another one of my favorite stories, is this user who told us that he has a daddy-daughter day once a week, or he spends quality time with his daughter and their favorite pastime sign. The favorite thing that they usually do is they fill up the car with gas and they go to drive around and look at like, other slightly more well-off people’s houses. And so with Sorbet, he had a little extra money, so he filled up the gas a little bit more that time and he had a little extra time to go a little bit further and spend a little bit more time with his daughter. Things like that. There are a ton of stories like that, but truly kind of giving people the ability to indulge a little bit and take care of themselves slightly more than they would’ve otherwise.


William Tincup (19:58):

Well, it gets to kind of well-being, mental health, all kinds of things that enrich people’s lives. If they’re not taking off work, they can’t have those moments, they can’t have that time to do those things, so I love it. And I’m sure there’s thousands of other stories like that. Questions that prospects should ask Sorbet, like what, because it is something that is new and great, that’s awesome. But what should they be asking you in the sales process? What are the questions that they should ask?


Veetahl (20:34):

So one thing that is important for us from a values perspective is that we never, never want to come off as if we’re disincentivizing people to take time off, because we’re very, very passionate about the fact that people should, to your point before, it is the right thing to do. People should take care of themselves, people should recharge. All of research overwhelmingly points to the fact that if people do take time off, their productivity improves, their stress levels go down, they’re more creative. So we’re all for that. What Sorbet was born out of, is the realization that not everyone can take time off. Sometimes, because they can’t afford to, or sometimes it’s because they’re a frontline worker and they can’t be replaced. And with that understanding that not anyone, everyone can use all of their time off. What we’re trying to do is, repurpose the amount of time that you can use towards your wellness.

And a lot of times what our customers actually use Sorbet towards, is to incentivize people to take time. So what we’re essentially doing is saying, if you use a certain percentage of your time, you can then unlock the rest of it, and use it towards enhancing your vacation, or taking care of yourself, or spending more time with your family. And that’s kind of our unique technology, which is our algorithm that allows every person to look into their usable versus their unusable time. We look at your previous consumption habits, we look at demographics, we’ll look at specific policies of your company, seasonality, things like that. And we can tell each and every individual, bespokely, what their unusable portion is. What we predict will ultimately be the portion of time they don’t use. And it’s that portion of time that we encourage them to then liquidate, cash out and use towards whatever it is that they need to use it towards. So, that’s one thing that we’re very passionate about.

The other thing is just on implementation. Very often people from HR are very, very hesitant about enrolling new HR programs, because of the friction. Our onboarding is super, super easy. We are in a position where we’re able to integrate with most HRIS systems rather frictionlessly. But the beauty is, that even if you want to try us out just with secured CSV files, it’s the most seamless experience. It’s kind of like, just uploading a file to any Google Doc experience. So very, very easy. Of course, we’re fully compliant, we’re stocked to compliant, so none of the data is stored with us. We only have anonymized data on our system. So it’s very secure, it’s very safe, and you can essentially start with us with an encrypted CSV file.


William Tincup (23:37):

I love it. Okay, so last question, the future for Sorbet in the next 12, 14 months or so, like what’s success for y’all?


Veetahl (23:48):

Just continue to grow. Onboard new customers, make a big difference in people’s lives. We’re seeing people now when they use our systems, they cash out almost twice a month. They use us almost on a daily basis. And it really is, there is that statistic that most Americans, if they had an emergency few hundred dollars expense, they won’t be able to afford it. And with Sorbet, on average, we’re able to unlock almost sorry, $3,000 in additional compensation, which I think is super impactful for people.


William Tincup (24:28):

Oh yeah. And it’s there already, they’re just not using it. And again, helps benefits both the company and the employee. This is wonderful, Veetahl, I have, it’s eloquent, what you’ve built is absolutely beautiful. Thank you so much for your time today.


Veetahl (24:46):

Thank you so much for having me.


William Tincup (24:47):

Absolutely. And thanks for everyone listening to the Use Case podcast. Until next time.


Announcer (24:52):

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The Use Case Podcast

William Tincup

William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.


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