It seems a bit crazy to think that some people don't take all their annual leave each year. We’ve all had days where we’d kill for an extra day off even though our allowance is spent.

You might be surprised to discover that not everyone uses their whole allowance. In fact, an ACAS study in 2015 found that half of UK employees don’t take all their annual leave, and actually take an average of 77% of their annual entitlement. Even when away on holiday, almost half of workers say they've done some work or been in contact with colleagues. Shocking!

Unused holiday can complicate things for employers, especially when a new year comes around and most allowances are reset. So what can you do when there’s a surplus of holiday that hasn’t been taken? Roll it over to the next year?

Should you allow annual leave to carry over into a new year?

In the UK, employers have no obligation to carry over holiday allowances into a new year.

Instead, it’s up to the company to decide. Many offer a small amount to minimise disruption while being accommodating to the worker - five days is typical. Any more than that can really complicate the allocation of time off for everyone early in the year.

A more sensible approach would be to consider why folks aren't taking their leave, and address those underlying issues.

Why don’t people take all their annual leave?

There’s a few reasons why the leave counter doesn’t reach zero by December 31st.

The most common one is that staff are afraid of work piling up, causing them to fall behind. This is understandable with business owners and entrepreneurs, but it’s not a healthy work-life balance for most people. Employers should be balancing the workloads of their staff appropriately, and if they're desperate for help, consider offering overtime or hiring contractors on a temporary basis.

Others claim they do it to impress their bosses in hope of a pay rise, and some reckon nobody else is able to do their job while they’re away. Schedule clashes can also contribute, when multiple people want the same day off.

Unspent allowances are especially common in companies with unlimited leave policies. While it seems like a fantastic benefit if you’ve not had it before, unfortunately, company culture tends to subtly discourage the use of it. And if there’s no allowance at the end of the year, there’s no incentive for bosses to insist on employee holidays. However, a workforce that never goes on leave is more likely to get stressed, burnt out and ill, so taking time off is worth promoting.

What to do if employees don’t take annual leave

If unused leave is a persistent problem, and staff are stacking up their allowance 'til the last part of the year, you’ll want to intervene. Here are a few tactics that might help.

  • Hire more staff - easier said than done, of course, but addressing staff shortages will take the pressure off everyone in the long-term if workloads are too much.
  • Manage projects effectively - this might mean hiring a dedicated project manager, or seeking more insight from staff about how much time their projects are taking. Companies could tone down their sales and marketing until things are calmer internally and staff have some breathing space.
  • Avoid schedule clashes - this one isn’t easy when two staff members want the same day off and you can only afford one. But with more flexible working times and holiday planning tools, this issue can be mitigated.
  • Encourage people to take leave - employee engagement is crucial here to develop a culture that values rest just as much as the grind. This involves not just communication around all parts of the business, but also managers setting the example by taking time off themselves.

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