Summer doesn’t always mean sun but it does mean lots of holiday requests. Although planning staff leave can seem like a straightforward HR activity, there’s plenty that can go wrong. Just ask Ryanair who had to cancel large numbers of flights after “messing up” pilot holidays last year.
Read on for the holiday management challenges your business is most likely to face and the steps you can take to ensure you don’t end up like Ryanair.
The Problem – Holiday Build-up
Allow staff to sit on their holidays and you’ll be saving up problems. No business can operate effectively if everyone keeps hold of their leave and tries to use it all at the same time.
While you don’t have to grant holiday requests, you also don’t want to disengage your employees by refusing holiday. Particularly if they have a lot to take and very little time to take it in.
Allowing large holiday balances to accrue also means staff will be tired, are unlikely to be performing well and could be at risk of burning out. All of which can lead to mistakes and disengagement which carry the risk of impacting your bottom line.
Good holiday management
Like any other aspect of your employee’s terms and conditions, holidays need to be managed. Ensure your line managers can easily monitor who has how much holiday and what’s been taken and when. Managers should also be aware of religious holidays for people of faith to ensure they know when to expect a glut of holiday requests.
A good way to gain oversight of holiday balances and to support leader in managing this HR activity is to set up holiday reporting as part of your suite of HR analytics.
Run monthly reports on the number of days’ holiday:
- due to be taken in the year
- that have been taken to date
- that have been booked in
Create your report so you can identify the position for your business as a whole and by team. This will help your managers identify who needs to take more holiday and encourage them to book leave.
Buying out leave
If employees have built up a lot of holidays it is possible to buy-out some of their leave. However, this is only possible for holidays above the statutory minimum of 5.6 weeks. Don’t forget that this should be the exception, not the rule as rested employees equal better performance.
With revised legislation around holiday pay, it could be worth bringing in an HR specialist to help you calculate the amounts accurately.
Carrying holiday over
An alternative to paying for holidays is to allow employees to carry over any holidays above the statutory minimum.
Be warned: this should be a temporary fix; if managers fail to manage holiday effectively the following year you’ll end up in a similar situation.
If employees are finding it difficult to take leave, you need to look at whether workload is preventing people from going on holiday. Alternatively, it could be a cultural issue where taking holiday is frowned upon.
Either way, you need to understand the reasons that leave isn’t being taken and take steps to tackle them.
The Problem – Too Many Holidays at the Same Time
Another issue you might face is when too many employees are granted leave at the same time. This is particularly difficult to manage at busy times of the year like Christmas and the summer holidays.
It can be challenging for managers to reject holiday requests, particularly when someone has booked a trip or made a family commitment before agreeing their leave.
The Solution – Just Say No
Remind line managers that employers don’t have to agree to a worker’s holiday request unless the contract of employment says otherwise. For example, many firms require employees to hold back a certain number of days’ holiday to cover the Christmas period and of course these dates would have to be agreed.
Your holiday policy should clearly set out what happens in periods of high demand, for example, operating on a first-come, first-served basis. Managers need to put on a thick skin and be prepared to deny holidays when they don’t work well for the business.
Communicating clearly with staff well before busy holiday periods will help employees plan their leave more effectively.
The Problem – Paying Incorrect Holiday Pay
It might sound surprising, but failing to pay employees properly during their holidays has been one of the biggest employment law challenges in recent years.
Holiday pay cannot be calculated solely on basic pay: it must include a range of other items like overtime, commission, stand-by and callout pay, shift premia and travel allowances.
The Solution – Determine Your Holiday Pay Formula
To accurately calculate holiday pay, you should take the period before the employee’s holiday (usually at least 12 weeks) to identify a true reflection of their pay.
If you’re unsure whether a particular allowance should be included, the rule of thumb is to add it in. Of course, over a period of time, this could prove expensive, so you may want to invest in an experienced HR professional to help you legally calculate employees’ holiday pay.
Managing employee holidays effectively is good for the health of your employees and your business. Rest and recuperation translates into improved motivation and less sick leave. Which ultimately improves your bottom line.
So, review your holiday policy and implement the suggestions in this article to watch your business’ well-being soar.
If you need help creating, updating or managing your holiday policy, contact Crosse HR to ensure you’re treating your employees legally and fairly.