Annual leave: five ways to avoid an end of year rush for holidays

For many employers, the end of the calendar year also marks the end of the holiday year.

However, a lack of communication and planning means every year many businesses face a last minute rush by employees scrambling to use their full entitlement before the year ends, with over half of the UK workforce failing to use their full holiday entitlement.

Failure to use up their full annual leave entitlement means many employees don’t get the rest and recuperation needed to maintain productivity, support their mental wellbeing and work/life balance.

By law, all full-time workers in the UK have a paid annual leave entitlement of 5.6 weeks per year; this can include the 8 Bank Holidays and is calculated pro-rata for part timers.

Under the Working Time Directive, the first four weeks of individuals’ annual leave cannot be carried forward into the next holiday year unless they are unable to take your leave due to maternity, sickness or injury or because an employer has refused to provide paid holiday entitlement.

Dawn Brown HR expert at MHR says: “Employees frantically rushing to use up their outstanding annual leave at the end of the year can have a huge knock-on effect for businesses, exposing them to potential employee shortages in the run up to Christmas as too many people look to take leave at the same time.

“In today’s digital era it’s extremely difficult to switch off from work, but actively encouraging employees to take a much needed break now and again can help maintain productivity levels and reduce the risk of burnout.

“If your holiday policy doesn’t allow for annual leave to be carried over, then now is the time to remind your people to use their full annual leave entitlement and show you appreciate they have a life outside of work.”

Dawn Brown provides five steps to help employers encourage their people to take annual leave and minimise the impact of last minute holiday requests.

1. Identify excessive unused leave 

With just a few months of the year remaining, now is a good time to establish who has what annual leave left to use. Gaining a clear picture of outstanding annual leave balances across your business will help you determine which individuals have excessive amounts of unused leave, enabling you to tackle the issue before it becomes a more serious problem.

2. Practise what you preach 

To prevent employees from building up unused annual leave, business leaders should periodically talk to each individual to ensure they are aware of what annual leave they have remaining. Advising employees that they risk losing any unused annual leave entitlement will encourage them to plan ahead when booking time off. Also, leading by example and taking your own annual leave will show others that you value your time away from work and others will follow your lead.

3. Have a clear annual leave policy 

A clear and accessible annual leave policy is essential to ensuring your people are clear about their rights. Employees may assume that any unused leave can automatically be carried over to the following year or paid-in-lieu. However this is not the case.

An employee must take all the EU statutory leave (four weeks) during the leave year otherwise it will be lost. The 1.6 weeks (8 days) which the UK added to this statutory leave may be carried over if the employer agrees. An exception to this is if individuals have been unable to take their annual leave due to being sick, injured or on maternity leave. In each of these circumstances, employees can carry forward any unused portion of their 20 days entitlement into the next holiday year.

Likewise, while payment for unused holidays may sound an attractive option, the only time someone can get paid in place of taking statutory leave is when they leave their job, when employers are obliged to pay for untaken statutory leave.

4. Promote the health benefits 

In every company there are some individuals who are workaholics and may be reluctant to take time off for fear that they will fall behind with their workload. As a business leader it is important to remind your people about the benefits of striking a healthy work-life balance and the health risks associated with long working hours and avoiding taking holidays. Placing posters on the wall or circulating emails internally which promote the importance of using annual leave will show your employees that you care about their welfare.

5. Simplify holiday bookings through self-service 

All too often employees fail to use their full annual leave entitlement because they fear any holiday requests will be rejected. Introducing a self-service portal empowers individuals to take greater control of their work/life balance, gain transparency of colleagues’ holidays and make requests directly to their managers for approval through the system, removing the need for employees to have awkward conversations with their managers. By empowering employees to better manage their working time they are more likely to spread their leave throughout the course of the year rather than try to book it last minute.