How to encourage employees to take annual leave

6 min read  |   20 June, 2017   By Melissa Jones

A man and a woman in cycling gear, sitting down on the grass and having a drinks break next to their bikes.

Many businesses have time periods throughout the year when they prefer for employees not to take holiday. 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 holiday blackouts.

Equally, due to smaller staff numbers, some businesses may stipulate that certain employees’ holiday 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 1 in 5 don’t take any time off at all.

Skipping holidays 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 holiday

Recent research from Breathe’s sick report shows that more than half of UK SME employees (54%) aren’t using up their full annual leave entitlement. The research found that the average holiday allowance offered to employees in a small business is a generous 25 days (not including bank holidays).

Companies with 5-9 employees come in below this average, offering 21.5 days in total compared to those at the larger end of the SME bracket with 100-249 employees who offer 25.9 days.

It was also discovered that those aged 18-34 have the lowest average annual leave allowance with 23.9 days and are the most likely to lose any holiday that they don’t book, with 17% saying that they lose any leftover holiday entitlement altogether.

Whilst it’s staggering how many people don’t benefit from their full holiday allowance, what happens with the remainder is also astounding. 26% of respondents roll any remaining allowance over onto the next holiday year, whilst 14% lose it altogether and 13% receive payment in lieu.

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How does a manager's holiday usage affect employees?

Managers who appear to view holidays 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 holiday allowance and instead are feigning illness to get some much-needed rest from work.

Nearly a quarter (23%) of employees have faked being sick, with the need for a ‘rest’ day being the number one reason.

Consider that burn-out is costing the UK economy £1.4billion a year and you’ll see the potential downside that comes from employers and their staff neglecting to take annual leave.

Read our Culture Economy Report to find out more

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.

Want to know more about building a positive workplace culture? Read about our Culture Pledge.

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 holidays 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 holiday 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 holiday 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 holiday remaining at the end of the year.

Here are 6 ways that you can encourage your employees to take the holiday 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 holiday from work easy

By setting out a clear policy and making holiday easy to book, business owners can set a precedent that taking holiday 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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