The other day I came across a client who had a problem with a staff member who didn’t want to go home. They lived for work – working long hours and not taking holidays. You might think this is a problem you’d like to have. After all, if they are valuable to the workplace, why not let them stay week in week out?
Unfortunately, there are a number of negative side-effects that result from employees accruing leave indefinitely.
Why You Need Your Employees to Take Leave
The financial cost to the company
It’s common practice for employees to store up leave. Maybe they have a big holiday in mind or want to retire soon. In principle, what the employee is doing is okay. Unfortunately, you could be hit with additional costs you hadn’t factored into your financial plan when they eventually take their leave.
For example, today you might pay the employee $500/wk. If there’s a pay rise next year however, that same leave might cost you $550/wk instead. The year after that, it may be $600/wk and so on.
If you are a small business, funds can be tight. It can be very tempting to spend the big lump of money that is accruing on other things as they arise. If your employee finally decides to take four month leave at once, you may not have the funds to pay them.
Will you need to get a temp in?
In most businesses, if an employee takes a couple of weeks holiday their job can be managed by the other staff until they return. But what if an employee decides to take and accrued 16 weeks holiday? You might need to hire a temp. That means you’ll have the additional burden of employing, training and paying an additional staff member for that period of time.
Create a policy
Quite often a business will make it known during induction that they have a maximum carry over amount (e.g. You get 4 weeks of annual leave per year, we allow you to carry over one week, meaning you must take at least 3 weeks off this year). Employees are told they must take time off if it looks like they will exceed the carry over amount.
Some very small businesses close their company for 3 weeks over Christmas. Employees are informed they will need to take their holidays during that time.
Sometimes it’s hard to enforce this if an employee is so dedicated to their work that they think the world will fall around them if they go away, or if they really are an integral team member, however you must enforce the rules as the financial risk is too great to be ignored.
As a duty of care, employers must ensure their staff take their allocated 4 weeks annual leave each year. You want your employees to get the rest and relaxation they need to fully recharge their batteries.
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