How to encourage employees to take annual leave

6 min read  |   7 April, 2022   By Melissa Jones


Many businesses have time periods throughout the year when they prefer for employees not to take leave. It might be an especially busy time such as a sale, or a time when your product or service is in high demand.

It’s important at these times that you have all hands on deck and so understandably many small businesses will implement leave blackouts.

Equally, due to smaller staff numbers, some businesses may stipulate that certain employees’ leave shouldn’t clash to ensure there is cover in a particular area or department. After all, 3 people could be 50% of your workforce and if they were all off at the same time that would have a big impact on your business.

Small business owners are notoriously bad at taking time off and booking annual leave. So much so, that one study showed 49% of small business owners haven’t taken leave in the last six months.

Skipping leave may feel like a temporary solution to get through busy periods. We tell ourselves, “I’ll take the time off when things are quieter / under control / when that empty role is filled.”

But the problem is there’s never a perfect time to take a break. And soon enough, a pattern of working day in, day out creeps in. Your business soon develops a culture of presenteeism which impacts employees as well as the business owner.

Employees aren’t taking their leave

A research in 2019 was carried out with 11,144 Australian employees and it has shown that the average Australian only takes 14 days out of their standard 20 days of annual leave each year. The unused leave days has seen a downward trend over the past 10 years where in 2009, Australians have only not used 3.5 of their annual leave days per year.

The research also highlights that Australian employees prefer going on short weekend holidays instead of taking several weeks off for a long holiday. In 2018, 1 in 6 Australians have failed to take a single day of leave.


How does a manager's leave usage affect employees?

Managers who appear to view leave and time off as a ‘nice to do’ quickly create an unhealthy culture. Employees become reluctant to use their annual leave entitlement, something that has far-reaching implications.

Employees who don’t use their annual leave entitlement are less productive, more likely to take unplanned absence and are more likely to suffer with health problems. Too many employees aren’t using up their full leave  allowance and instead are feigning illness to get some much-needed rest from work.

One of the top reasons for Australian employees to fake a sick day is  the need for a ‘rest’ day.

Consider that burn-out is costing the Australian economy $11 billion a year and you’ll see the potential downside that comes from employers and their staff neglecting to take annual leave.

Here's why it's important for business owners to take annual leave

Taking annual leave sets a good example

By taking all their annual leave and respecting their employees’ time off, employers set a healthy precedent for the rest of their business.

This means employees feel comfortable taking the annual leave they are entitled to and leaving work behind when they do so. The result? More effective and happier employees who will deliver better results for your business.

Time off nourishes creative thinking

Being consumed by work and your working environment day in, day out can restrict your perspective. By changing your scenery and routine, you leave yourself exposed to the unknown and new experiences.

And this has the potential to fuel creativity, creating eureka moments and the opportunity to see old problems in a new light. Sometimes all we need is a step back to see things clearly and break the habits we’ve created.

Taking annual leave supports a more satisfying lifestyle

For many business owners, the work/life balance is a myth. It’s more realistic to call it a work/life blend. The two sides coexist and blend in with one another; compartmentalising them just isn’t practical.

But taking time off is important for us as individuals. Not least because it gives you an opportunity to limit your involvement with work and focus on other things, such as family, friends, hobbies, even volunteering.

Sure, there’ll always be the odd email to respond to, but you can keep it to a minimum. This gives you the chance to do something else, strengthen relationships with others and protect your mental health.


Business owners who take their annual leave reinforce a positive workplace culture

As with so many other things, employers who take their annual leave and actively encourage their employees to do so, set the tone for a more positive workplace culture.

Similar to flexible working, parental leave and a no-evening-emails policy, bosses who take annual leave start a chain of events that build a positive and sustainable company culture.

Taking annual leave shows you trust your team

It can be difficult for business owners and managers to take a break because they know the buck stops with them. But it’s important to recognise that we can’t do everything alone.

Managers who make themselves indispensable are sending out a message that they can’t / won’t trust their employees. It’s a demotivating message and one that can affect the way your staff work.

Instead, by planning to take leave and empowering your team to work without you looking over their shoulder, you show them that you trust them.

A reluctance to take annual leave can have a more detrimental and lasting effect on your business than a well-planned fortnight away could ever have. Set the right example, show you trust your employees and promote a positive culture – and the rewards will be clear to see.

Annual leave is a benefit to businesses

Employees taking annual leave is good for business as well as the individual. Of those that don’t use up their leave allowance 42% subsequently pull a sickie from work in order to rest.

Founder and Managing Director of HR consultancy HR Revolution, Wendy Read says:

“taking a break, especially a good chunk of time for a holiday, is extremely important for self-preservation but also enhances and refreshes your approach to things. Often I see my team return from a holiday refreshed, energised and reengaged ready to get stuck back in and help the team. It’s a super-positive way of working and should always be encouraged.”

So it’s apparent that the leave allowance is needed and therefore business owners need to do what they can to encourage employees to take annual leave and reduce the amount of employees with leave remaining at the end of the year.

Here are 6 ways that you can encourage your employees to take the leave that is owed to them.

  1. Have a clear policy
  2. Encourage holiday talk in your company
  3. Be happy when employees book time off
  4. Use imagery around the office
  5. Implement rollover limits
  6. Make booking leave from work easy

By setting out a clear policy and making leave easy to book, business owners can set a precedent that taking leave from work is encouraged.

There is a reason that employees are given an annual leave allowance and it is important that business owners are seen as supporting their staff in their need for holiday.

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Author: Melissa Jones

Mel is the Content Manager at breatheHR. She regularly contributes insights into the current small business climate with a focus on how HR is crucial to the success and growth of UK startups.

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