It seems a bit crazy to think that some people don't take all their annual leave entitlement each year. We can all think of times we’d kill for an extra day off even though our allowance is spent.
And we know all too well the problems if people don't take all their annual leave, we end up with a tired team, everyone wanting to take weeks off at the same time just before year end, lots of carry forward, and potential burnout issues. It's just not good for a healthy workforce.
You may or may not be surprised to hear that not everyone uses all their holiday entitlement. In fact, on average we only take 77% of our annual entitlement each year. Even when we're away on paid holiday, almost half of us say they've done some work or been in contact with colleagues. Shocking!
Unused holiday entitlement does complicate matters, especially when a new year comes around and we need to work out what to do with your balance remaining.
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.
Editors note: because of COVID the government has updated regulations to allow annual leave entitlement to be carried over into the next 2 years.
Normally it’s up to the company to decide, and you'll find 5 days is a typical amount you'll be allowed to carry into the next year.
At first glance it looks sensible, but it's got downsides. It sends a message, "don't worry about taking your holidays, you can do that next year". When the reverse is true, you want people to take their annual allowance in the year it's earned.
A sensible approach would be to consider why people aren't taking their annual leave, and address those underlying issues.
Why don’t people take all their annual leave entitlement?
There’s a few reasons why the annual 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. It's understandable but it’s not a healthy work-life balance for most people.
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.
What if you have unlimited holiday entitlement?
It's kind of all the rage at present, it's the headline grabbing benefit that's not all it seems. While unlimited holiday entitlement seems like a fantastic benefit, unfortunately, company culture tends to subtly discourage the use of it. And if there’s no annual leave 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 annual 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 people don't take their annual leave then you've got a problem brewing. Your team are stacking up their allowance 'til the last part of the year, you’re going to want to intervene before it really hurts. Here are a few tactics that might help.
- Hire people - easier said than done. But of workloads are too much then addressing staff shortages will take the pressure off everyone in the long-term. You won't mind so much if someone takes annual leave if you can cover their absence properly.
- Manage projects better - hire a dedicated project manager, get some decent project management software, or improve the current system. You're looking for efficiencies and a better way of working.
- Slow it down - dare I say it? You could ease up a little, tone down your sales and marketing for a while to give everyone some breathing space.
- Avoid clashes - not easy when two people want the same day off. But it can be mitigated and managed with more flexible working times and good annual leave software.
- Encourage people to take leave - try to develop a culture that values rest just as much as the grind.