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What happens when your staff don’t use all their annual leave?

Monday, 20 Jan 2020

It’s the start of a new year – and, for many companies, a new holiday calendar. But while most employees look forward to their leave entitlement renewing, there are always a few people with days left to spare from the previous year. How your business handles unused holiday can have a major impact on employee relationships.

Choosing whether to let staff carry leave over or adopt a ‘use it or lose it’ policy is an important decision that every business needs to make, as it affects your planning capabilities. With both approaches, you need to set clear expectations and closely track how many days’ holiday staff have used up – or beware the consequences of disgruntled employees!

Should you let staff roll-over their annual leave?

In an ideal world, every staff member would use their full holiday entitlement each year, and also spread those days out evenly across 12 months. However, workload, deadlines and personal circumstances can leave employees with surplus leave at the end of the year, which they wish to roll into next year’s entitlement.

There are benefits to allowing holiday carry-over; it gives staff greater flexibility, which makes them feel more valued and trusted, and it also means you can keep staff in the office during busy final quarters, with the promise they can use up leave when times are quieter. However, managing rolled-over leave is not without its challenges.

For starters, not everybody will transfer leave to the next holiday year, and even those that do carry time over will not be consistent in the number of days they bring forward. This leaves your company in a situation where staff members have differing holiday entitlements.

Managing multiple leave allowances through manual systems and spreadsheets can make your business vulnerable to errors – employees might inadvertently end up taking more days off than they should, for example. It’s also a headache for managerial and HR staff.

The easiest way to enable flexible annual leave management is to invest in online holiday planning software, where unused leave can be tracked and carried over to the next holiday year, and each team member’s total allowance is calculated accurately.

Is it better to make staff use up their holiday allowance?

Given the logistical challenges of letting staff roll-over annual leave, you’d be forgiven for thinking a ‘use it or lose it’ approach would be simpler. However, this model still needs to be managed carefully, in order to keep the workforce happy.

The major drawback with enforcing holiday entitlements is that it can upset staff who haven’t taken all their days. Demanding projects or calendar conflicts with other team members can make it difficult for employees to secure the time off they want, and they may end up losing out through no fault of their own.

If you choose to ban roll-overs, the best thing to do is set clear company policies, and then remind staff of the guidelines at the start of the new holiday year.

Onboarding leave management software can also be extremely helpful, as management and HR personnel can track how many days each employee has taken, and warn staff with a large chunk of leave remaining that they need to use their full entitlement by the end of the year.

Whatever your decision, online software can help

When it comes to managing staff leave, there’s no right or wrong answer – it’s up to you how you run your company. But, regardless of whether you allow people to carry time over or not, your holiday calendar needs to run like a well-oiled machine.

Digital leave management software is an easy, cost-effective way to simplify your company holiday calendar, and make sure staff entitlements are managed accurately and effectively.

Dependent on your set-up, every member of the company could access a central calendar, to see who’s off at any point in time, while senior staff can track how effectively staff are using their allowance.

WhosOff is already helping thousands of businesses to manage staff holiday better. To see how simple our online software is to use, start your free trial.

Photo by Plush Design Studio of Pexels.com

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Posted by Tony Bushell

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