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Making the most out of leave

30 April 2018

Not surprisingly, even employees who genuinely love their jobs still tend to enjoy a spell out of the office with their partners, families and friends.

Indeed, recent research by Xexec found that annual leave was the most valued employee benefit by a country mile.

Its survey of 1,720 employees found that 43% picked annual leave as the work-related benefit that would make them feel most loved at work. The next most popular were public recognition (15%), team drinks (15%), training (10%), professional mentoring (7%) and having a lie in every week (7%).

This pretty much tallies with our my own experience, particularly with regard to millennials. We recall, in particular, one former client with a distribution centre that offered staff the chance to buy a week’s additional holiday via a flex scheme. It had a 50% take-up rate, driven partly by childcare requirements during the school summer holidays and partly by people wanting to take days off for long weekends.

But even employers – particularly smaller ones – who fully understand the popularity of additional leave amongst their workforces may be concerned that their businesses simply can’t sustain employees having more time off.      

There is a clear balance to be struck between having a workforce that feels valued and having one that is actually there to carry out its duties and keep customers happy!

So the key is to indulge in a little strategic thinking around leave, ideally in conjunction with an expert firm of advisers. We can help you assess exactly what holiday entitlements you can afford to offer and ensure that the exercise is conducted as seamlessly as possible.

One commonly overlooked point is that if employees are allowed to sell as well as buy leave entitlements then the buyers and sellers can balance each other out to an extent.

Keeping track of such entitlements may sound highly complex but we can recommend inexpensive software that can handle the task with a minimum of hassle – either inside or outside a flex system.  

We can also ensure that everything is arranged in a highly tax-efficient manner for both employer and employee. Using a salary sacrifice basis can save significant amounts of tax and NI because less salary is actually paid when exchanged for holiday.   

The fact that holidays are not considered to be a benefit in kind also saves employees from incurring P11D liabilities and avoids employer’s NI.        Employers often overlook the fact that the savings achieved in salary, tax and NI can release additional budget to cover any extra resources required to cover the time off.   

Furthermore, although there is still no official research we aware of to prove this, there is plenty of anecdotal evidence that allowing employees more flexibility with leave can cut absenteeism problems – and can therefore significantly benefit the bottom line.  

Even in cases where employers feel they can only afford to offer minimal additional time off, they could consider approaches such as giving employees one extra day’s holiday on their birthdays or offering a couple of ‘duvet days’ a year – when staff can opt out of coming to work if they phone in by 11am.  

Whilst the latter invariably tends to get used by people who wake up with hangovers, this can cut presenteeism costs. Not only would they not perform to their maximum if they came to work but they could also distract colleagues or even lose clients by putting the wrong figures on correspondence or by making inappropriate comments.  

Chase de Vere can also recommend effective alternatives to granting employees sabbaticals, which have tended to prove a problem in industries involving professional qualifications – because those returning from their travels often look around the market for other jobs.  

If, for example, an employer offered the chance to buy up to six weeks paid holiday spread over 12 months instead of simply giving unpaid time off then employees will still owe the company money on their return and should be less likely to leave.

If you would like to find out more about how Chase de Vere can help you with devising and implementing cost-effective strategies for buying and selling holiday entitlements then please do not hesitate to contact us on 0345 300 6256 or complete this simple form and we’ll call you.