Ensuring your employees use their holiday entitlement

With a recent survey from Glassdoor finding the majority of UK employees didn’t take their full annual leave entitlement, we decided to explore the findings further and see how this approach to holidays is affecting the UK workforce.

What did the survey find?

The survey found that, in the past holiday year:

• The average amount of annual leave taken was 62% of the full entitlement
• Just 40% of UK employees took a maximum of half their annual leave entitlement
• 13% of employees only took 20% of their full allowance
• 43% of employees took between 91% and 100% of their entitlement

Glassdoor’s survey of 2,000 full and part-time employees also looked at whether those on leave managed to ‘switch off’ and found that 23% of those on holiday “regularly checked emails”, with a further 15% continuing to work because they were afraid of missing targets, and/or because they didn’t want to be behind with their workload once they returned to work.

Breaking the results down into key demographics, Glassdoor found that only 40% of 25-34 years old were likely to take their full holiday entitlement, and this figure dropped to 35% amongst 18-24 year olds.

Further findings

Glassdoor’s survey also went on to investigate the quality of annual leave employee have, and found that only 50% of respondents said they could completely relax on holiday as a result of work.

Glassdoor also heard that 20% were “expected to be reachable and available to carry out work if needed”, and that 15% of those surveyed had actually been contacted by managers while they were on paid annual leave.

Interestingly, 52% of women said they could “completely check out” when on holiday compared to 46% of men, but a higher percentage of women (16% vs 14%) admitted to working while on holiday because they were afraid of falling behind.

What’s the problem?

The lack of both quality and quantity paid annual leave can create serious problems in workforce’s retention and productivity.

Recent figures from the Office of National Statistics found that 3 million employees now work more than 48 hours a week. These longer working hours, coupled with shorter and poorer quality time off can increase the risk of burnout and the desire to change jobs. Those that choose to stay could work with reduced productivity as a result of feeling overworked and unrested.

With the average cost of replacing an employee at £30,000 – it makes financial sense for businesses to retain their staff for as long as possible, and to ensure they take their full annual leave in peace to encourage them to stay.

Aside from that, continuity within a team is better for a business. The product or service knowledge they build up over time, alongside the relationships they form with colleagues, simply can’t be replaced once an employee leaves. 

What’s the law?

Legally, your employees are entitled to 5.6 weeks’ paid annual leave per holiday year (as per the Working Time Regulations 1998).

Depending on the employee’s circumstances, the amount they are paid for this annual leave is calculated using an average weekly pay for the 12 weeks preceding the annual leave (The Employment Rights Act) and as a pro rata percentage of their total hours worked (Working Time Regulations).

Interpretation of these law’s often leads to Employment Tribunal cases, such as the recent case on zero hour contracts: Brazel v Harpur Trust.

How can we help?

Annual leave is difficult to manage regardless of your team’s size. Smaller teams can soon find skill shortages when individuals take annual leave, leading to logistical nightmares, whereas requests from larger teams can creative an enormous administrative burden.

That said, it’s essential that each member of the team is properly handled in regards to their annual leave entitlement. Even more essential is that their holiday pay is properly calculated, to avoid any tribunal action against you.

To help businesses navigate this difficult aspect of payroll, we’ve developed the Holiday Module which will:

• Define the pay elements you need to include in your holiday pay calculations
• Allow you to track holiday rotas across your teams
• Calculate 12 week weekly earnings for monthly paid employees
• Specify different enhanced and contractual holiday entitlements and more

To see how this would work for your business, request a free demo by calling 03300574553 or visiting this page: https://www.iris.co.uk/iris-solutions/payroll-and-hr-professionals/for-large-organisations-with-more-than-250-employees/holiday-pay-module-2/

If you’re worried about holiday pay and annual leave, pick up a free copy of our guide to Holiday Pay in 2018 – available to download here: https://www.iris.co.uk/guide/iris-holiday-pay-guide-for-2020/