Why you should encourage employees to take annual leave

Everyone loves - and needs - a break from work. We know that rest & time off the clock can support our mental health & wellbeing. 

But what if people aren't taking their leave - or aren't using their full entitlement?

Research reveals a third of UK employees didn't use their allocated holiday allowance in 2022. In this blog, we look at how SMEs can encourage people to take breaks & use their annual leave. 

Equally, due to smaller staff numbers, some businesses may specify that certain

Small business owners are notoriously bad at taking time off and booking annual leave. Research shows 7 in 10 small business owners take less than 20 holiday days a year - which is less than the minimum statutory leave entitlement.

Skipping holidays may feel like a temporary solution to get through busy periods. Some people tell themselves that they'll take that break when things are quieter, under control, or when that empty role is filled.

But the problem is that there’s never a perfect time to take a break. And soon enough, a pattern of working constantly creeps in. Before you know it, your business soon develops a damaging culture of presenteeism.

UK employees aren’t taking their holiday

Our new holiday report 2024 revealed that a huge 35% of UK employees don't use their full annual leave allowance. 

What's more, 81% of those surveyed reported feeling burnout when they can't take their holiday days and 57% said they would work during their annual leave (even when they're officially off the clock). 

So - we know something isn't right. UK employees aren't taking their leave, and when they do, they're sometimes working. 

It's down to the culture of your SME to reinforce the need for employees to take their well-deserved (and legally entitled) breaks - without the expectation of logging on from the poolside. After all - what can really be that urgent? 

Why managers should set the right example

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, which 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, including stress.

Research from Breathe's People First Culture Series - edition 1, wellbeing, revealed that a huge 47% of employees had felt stressed (in the previous 3 months), with 12% taking sick leave due to stress. 

Encouraging a culture of taking breaks regularly is vital for the wellbeing of your team - and for managers, too. 

Reasons why it's important to take annual leave

Not that you should need reasons - taking time off needs no justification. But we've put together reasons why taking holiday is important (just in case anyone needs convincing). 

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.

Supporting a positive workplace culture 

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

As with so many other things, employers who take their holiday & 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 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 advises:

“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.

I often see my team return from a holiday refreshed, energised and re-engaged - ready to get stuck back in & 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.

6 ways you can encourage your employees to take their holiday:

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's a reason that employees are given an annual leave allowance & it's important that SMEs support their people in taking their well-earned holiday.

Unsure on calculating holiday entitlements?

We know it can be confusing - which is why we've created our simple guide to holiday entitlements, containing all you need to know.

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