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Is annual leave carry over a good idea?

Tuesday, 19 Oct 2021

Many companies choose to run their holiday year alongside the calendar year – which means the countdown to Christmas is also the last chance for employees to use their annual leave entitlement. But what happens when someone is unable to take all their holiday before the end of the year?

Is it a good idea to let staff carry over 2021 holiday into 2022? Or should team members be encouraged to ‘bulk book’ their remaining days off now? Let’s look at the argument for both approaches, so you can decide what’s best for your business…

What are the benefits of carrying over annual leave?

There are many reasons why employees can be left with a stockpile of annual leave to use; from busy schedules and understaffing, to simply mismanaging their holiday entitlement.

Whatever the cause, companies need to decide how best to manage people’s remaining time off. And for most firms, this means weighing up the pros and cons of carrying over annual leave.

There are many benefits to transferring time off to the next holiday year. For example:

  • Allowing carry over prevents a sudden influx of holiday requests in the last few weeks of the year, which can create a huge admin burden for managers and HR.
  • A surge in last-minute holiday bookings can lead to staffing shortages during a critical trading period, whereas carry over allows people to book time off when it’s quieter.
  • Staff may not have been able to take time off this year through no fault of their own – for example, work demands have been higher than usual – so they will appreciate the flexibility of rolling holiday over.
  • Pandemic travel restrictions mean many employees have higher-than-usual remaining holiday entitlements; UK professionals racked up 6 billion hours in unused leave during lockdown. Allowing carry over means this backlog can be used over a longer period.

Is there a negative impact to carrying over annual leave?

While there are clear advantages to rolling staff holiday into next year, it’s not always plain sailing introducing a carryover policy. When you’re weighing up the benefits and barriers to carrying over annual leave, you may also want to consider potential negative impacts:

  • Hardworking staff may be burnt out at this point in the year, and giving them the option to roll over leave could prompt them to move their allowance to next year rather than taking much-needed time off.
  • Stacking up too much unused leave can result in staff having a very high holiday entitlement next year. You might want to cap the number of days that people can roll over to stop holiday allowances from building up to unusable levels.
  • Annual leave management becomes more complex when each employee has a different number of days in their allowance, which is why many companies invest in holiday planning software to coordinate staff time off.

WhosOff monthly overview screenshot

The advantages of coordinating carry over through leave management software

Ultimately, your policy on carrying over annual leave is personal preference, and you should set out your intentions clearly before the end of the year. Otherwise, staff may be expecting to carry over their untaken holiday when you’d prefer them to ‘use it or lose it’.

However, increasing flexibility around how and when people take time off prevents employees from losing their legal holiday entitlement – and using online software to manage carry over avoids logistical headaches.

With an online staff holiday system like WhosOff, your business can custom-set each employee’s holiday entitlement in line with company protocol. For example, limiting the maximum number of days that people can roll over each year, or setting minimum notice periods for booking time off.

An online leave planner will also help you manage the impact of carry over day-to-day, automatically add each team member’s time off to the holiday calendar when their request is approved. Plus, it will deduct that time from their total allowance – so, at any point in the year, you can see exactly who’s booked days off and how many they have remaining.

Whether you choose to offer carry over or not, gaining greater visibility over how and when people take time off allows you to keep track of who isn’t using up their holiday allowance. This way, you can avoid carry over snowballing into an unsustainably large volume of unused annual leave, or remind employees that failing to use their full entitlement will result in those days off being lost at the end of the year.

Try WhosOff for free to start managing your 2021 staff holiday carry over online.

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Posted by Bradley Revell

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