Annual leave plays an important part in keeping your employees happy and healthy – but it can be tricky to manage. You need to ensure people are clear about what their holiday allowance is and work with team leaders to make sure that leave is taken in a way that doesn’t impact productivity.

This guide offers some top tips on how to manage annual leave for your staff so that everyone is happy.

Have a clear holiday policy

Everything should start from a solid foundation – and that means a clear policy that is communicated well to everyone, preferably in their contract and employee handbook. The policy should spell out:

• The holiday allowance – including details of any extra days above the statutory limit and the rules around bank holidays, as well as clarity for those working irregular hours
• The process for booking holidays and any rules about how much notice you require for these to be approved
• Any rules you might have about restrictions – such as limits to the number of people off at once or over busy periods for your business
• Details of who to contact with any queries about holidays taken

If that’s in place – and is easy to access – then many of the common questions you have in HR will be covered.

Bring holiday into the discussion

Line managers should have regular one-to-one meetings with their employees and these really ought to focus on matters beyond day-to-day work. You might want to encourage them to ask about holiday from time to time. They shouldn’t nag someone to book time off that they don’t really want, but sometimes people need a reminder to put time aside in their calendar.

Often, overworked employees will put off booking holidays because they feel they are too busy – but this can be the start of a bigger issue that leads to problems with stress and ill health from over-working.

Some people also tend to miss out on the time off they really want because they’re slow to plan out their time off and a ‘first come first served’ means they’re at the back of the queue. Talking to them about their holiday helps you to understand what is important to you and can let you cater for quieter members of the team who might otherwise always be forced to compromise on their plans.

It’s important to see how the issue of employee health and happiness is linked to absenteeism – and how holidays can help both of those important ‘Hs’.

Keep a record – and use it

All businesses will keep records of the holidays booked, but astute companies with an eye for the benefits of using data will be able to take a more strategic view. For example, you might notice that one department in particular has used a very low percentage of its leave in the first half of the year. That might store up a productivity issue if those employees all suddenly need to squeeze in their holiday into a short space of time – and it might be worth working with the line manager to plan this in, rather than creating an issue in the last few weeks of the year.

While you want to let employees determine when they take time off, encouraging them to spread their days out, so that they have some time off in each quarter of the year, will be good for managing resources and ensure they don’t go too long without a break.

Flexitime

Some employees feel compelled to book a holiday for things that probably don’t need it. A forward-thinking business that embraces flexible working would be able to let its staff take time for appointments, school events or trivial matters that then free them up to be able to take their holiday when they really want it.

While flexible working and holiday are separate matters, it is important to see the relationship between the two – and how doing one properly benefits the other.

Time for a duvet day?

Not all annual leave needs to look the same.

Some companies allow employees to save an emergency day in their back pocket for a last minute day off that they need to take. Whether you call them duvet days or last-minute holidays, employees might welcome having the freedom to call in a day off at short notice and they’ll enjoy the freedom and better work/life balance that this gives.

Some companies also allow their staff to buy one or more extra holiday days if they find they’ve run out of their allowance and want to take time off for a special occasion or an out-of-the-blue reason.

This can help to prevent absenteeism too, giving people less reason to feel the need to phone in sick when they feel they have no choice.

Rolling days and buying back holiday

It’s also worth considering what you’ll do about un-used holiday days. If you’re going to let them roll into the following year, then how will this be recorded and how many will you let them roll?

If you offer more days than that statutory limit, you can offer to buy them back from your employee. It can be smart to offer this to employees who still have a number of days to take towards the end of the year. The alternative might be that they have to ‘use them up’ and have leave when they don’t really want it and you can ill afford for them to be off work.

Managing holiday properly is good for business and good for your employees. Being clear about your holiday policy and managing this carefully will ensure that you get the benefit of a smooth running holiday process and are able to focus on keeping your staff happy, healthy and, as a result, productive.

If you’d like advice on HR policy, including holiday management, get in touch with one of our HR experts.