Holidays! We Brits love them. In fact, 75% of us said we would take all, or almost all, of our holiday entitlement, according to YouGov research. This certainly makes managing annual leave effectively a top HR priority for businesses.
What is more, of 22 countries researched worldwide, British people topped the leader board for being the most likely to say they would take all of their annual leave. In fact, encouraging staff to take annual leave has great benefits for productivity and wellbeing.
How to manage annual leave
For UK businesses, this means that holidays will never be off the radar, with holiday management being an ongoing challenge throughout the year.
As such, if you are responsible for managing annual leave, you will have a lot of issues to consider:
The need for a clear holiday policy
Drawing up a holiday policy and communicating it to your employees can help avoid misunderstandings or resentments caused by a lack of clarity over your rules.
Spell out the process for holiday bookings, including how your business handles holiday requests for busy holiday periods or clashing requests for annual leave.
You should also make it clear whether staff can carry over holidays into the following year, as this should only be allowed in certain circumstances.
Finally, you should explain what happens to any outstanding days’ holiday when an employee leaves your company and how it will affect their final pay cheque if they have taken more holiday than they were due before they leave.
Related article: Holiday policy tips: is your holiday policy fair?
Calculating the correct holiday entitlements
While this can be fairly straightforward for full-time employees, it can become much more complicated when trying to work out entitlements for employees working different hours and shifts. Thankfully, here at myhrtoolkit we've written guides on how to calculate holiday entitlement, calculating entitlement in hours, and calculating entitlement for leavers too!
Also, if a member of staff claims sick leave for any days’ holiday on which they are ill, you will need to ‘restore’ these days to their untaken holiday entitlement.
Related article: Managing sickness and annual leave when they overlap
Understanding holiday pay
Holiday pay can also be far from straightforward. In some instances, if your employees work overtime or are paid commission, this can affect how much holiday pay they are entitled to. So, it's important to understand the law around these issues.
Equally, if an employee decides to take their holiday as sick leave instead, this can affect their holiday pay.
Advice on effective holiday management
The raft of issues surrounding employee holidays can prove quite a conundrum. However, there are real benefits in managing holiday correctly in terms of maximising employee engagement and minimising the risk of expensive claims.
If you need more advice, organisations such as Acas offer specific training days on managing holidays, which can prove very useful. Alternatively, you could consult an employment lawyer who can help you clarify the law relating to pay and entitlement.
It can also be worth working with a professional HR consultant, if you don’t have in-house expertise, who can advise you on the best approaches to the effective management of annual leave.
How to stop holidays affecting business productivity
Written by Fiona Sanderson
Fiona is Marketing Manager at myhrtoolkit. Her areas of expertise include HR systems, productivity, employment law updates, and creating HR infographics.