If you manage an SME, then you might have genuine worries about how staff holidays will impact on your business. But whilst concerns over inadequate cover or losing a unique skillset during vacations might be relevant, there is strong evidence that staff holidays can actually bring productivity gains to your business.
The facts on holidays and productivity
We might think that focusing on a healthy work/life balance is a preoccupation of the 21st Century, but in fact the Ford Motor company was breaking ground in this area almost a hundred years ago.
In 1926, after running various tests to establish the optimum working week for productivity, it decided to introduce a 5-day, 40 hour workweek for the workers in its car manufacturing plants. The following year, they extended this policy to their office workers.
In theory, one would expect a shorter working week to result in a fall in productivity, but research shows that a fresher workforce performs at a higher level, delivering similar levels of productivity over a shorter time.
For example, Ford Motor company found that while adding another 20 hours to the working week did initially result in a small increase in productivity, after three to four weeks this actually had a negative impact on productivity.
Of course, Ford Motor also considered a 5-day week important for giving employees a better work/life balance; resulting in a win-win situation for both the business and their staff.
This work/life balance is being promoted even further in many of today’s companies, with many discouraging long working days and some even removing the cap on holiday entitlement completely.
The unlimited holiday trailblazers
Virgin Group and Netflix are just two of the well-known companies that have introduced unlimited holidays for their staff. Interestingly, this daring measure seems to have had a negligible impact on productivity.
Founder of Virgin Group, Richard Branson said: “Some [staff] take maybe six weeks, or two months instead of two weeks, but they get their work done and the company is certainly not suffering. The company is benefiting from the fact that people who work for it enjoy what they are doing, they respect the company for trying new things and they don't abuse it.”
Whilst Virgin Group and Netflix are large companies, it can be argued that optimising staff performance is even more vital in SMEs with limited human capital.
Unlimited holidays won’t work for every business, but right now a wide range of enterprises, from law firms to IT businesses, are finding it works well for them, particularly for roles focused on results and deliverables.
But what if your staff don’t want to take holidays?
Whilst you as an employer might have a very positive and flexible approach to staff taking holidays, from time to time you may come across staff that just don’t want to take a break. This might be for a number of reasons and particularly where staff think they can get paid in lieu of taking holiday.
However, in the UK staff cannot opt out of the annual leave provisions and by law every worker, whether full or part-time, must be given a minimum of 5.6 weeks (28 days) annual leave each year inclusive of bank holidays.
What is more, having staff that don’t want to take holidays should sound a warning bell in terms of their wellbeing. Several medical studies have shown a lack of vacation time can lead to a significant increase in the likelihood of developing serious illnesses.
For example, a study of 13,000 middle-aged men at risk of heart disease showed that the ones that went without holidays for five consecutive years were 30% more likely to suffer a heart attack than those who took at least one week’s holiday a year. There have also been equally alarming results from similar studies focusing on women’s health.
Related article: How to encourage staff to take annual leave
Making sure you manage holidays effectively
Whether you are looking to offer staff the statutory number of days’ holiday or, at the other end of the spectrum, you want to adopt an unlimited holiday policy, you will need to take a considered approach to make sure it functions as smoothly as possible.
Make sure all of your staff are aware of their entitlements and make it clear to them that your firm has a positive attitude towards staff taking holidays to ensure their well-being.
Using HR software that gives staff access to a shared holiday planner can be a good way of empowering employees to identify the best times to be away from the office. This is because they can choose times that ensure adequate cover and avoid any dates you specify cannot be taken as holidays e.g. peak sales/production times.
What’s more, if your staff can request holiday online and get a swift acceptance at the click of a button from their manager, this can also underpin a positive culture towards taking vacations.
It might also be worth talking to staff separately to find out how and when they like to take their holidays, as they might have the answer to a perfect holiday schedule that suits all.
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.