Increase Customer Service, Performance and the Bottom Line by Reducing Accrued Leave

It’s hard to believe how quickly each year goes by and before we know it, the workload has got so high that the thought of taking time off to go on holidays seems unrealistic. Isn’t this the story for most Australian workers?

Whether you’re an employee, an employer, or in it for yourself, holidays are something we tend to talk about, but they’re just not a priority when there’s so much else to consider.

Well, studies have now revealed that you’re not the only one. Data shows that Australia’s 6 million full-time workers have more than 100 million days of accrued annual leave between them.

Figures also show that Aussies working full-time are working longer hours than most OECD nations (a group of 35 countries committed to democracy and the market economy; typically developed countries with high-income economies) whilst simultaneously using less of their annual leave entitlements.

Is the dedication that Australians have for work a good thing or a bad thing?

On the one hand, Australia obviously has plenty of hard-working citizens who strive to achieve at work and prioritise what they do in the workplace. On the other hand, however, we have a large group of individuals who fear falling behind at work and are therefore unknowingly working themselves to the bone. This has the potential to lead to serious repercussions, not only for the individual, but for their organisations as well.

The negative impact of missed holidays

“Accrued leave balances are like a debt for businesses, and it’s also a debt that goes up with every wage increase,” says Craig James, CommSec’s chief economist. “Every week of leave your staff take helps your bottom line.”

Not only does overwork and exhaustion lead to an increase in accidents, injuries, and illnesses, but it also leads to a decrease in performance and productivity. It affects, not only the employee, but everyone else in the workplace too. Focus and vitality are out the window, projects being completed on time become a fantasy rather than a reality, and customer service takes a sudden downturn. This leads to lost business and falling revenue, a side effect any sound business person would prefer to avoid.

An Ernst & Young research study lead the firm to find that for every extra 10 hours of holiday its employees took, their average annual performance ratings rose by a massive 8%. Holidays not only make workers more productive after the fact, but can also make them more focused in the lead up by giving them a deadline to work towards.

For every extra 10hrs of holiday E&Y employees took, their average annual performance ratings rose by a massive 8%.    Click to tweet

With the average Aussie earning just over $78,000 a year this means if an employee leaves to move to a new job, every week of accrued annual leave equals over $1,700 a boss may have to pay out. Remembering back that there is enough annual leave saved up in Australia for four weeks for every full-time worker, this equals huge business liabilities across the nation.

Research also shows that costs arising from workplace-related illnesses and injuries potentially cost the Australian economy $15 billion a year. Once you add in the hidden on-costs and lost productivity, this figure could skyrocket up to $37 billion! But even this figure is not completely accurate and does not include a large chunk of stress-related claims. It is therefore estimated that occupational health and safety (OH&S) accident and disease costs may be as high as a billion dollars a week for the Australian economy and it is safe to say that a large percentage of stress-related illness and injuries resulting from overwork can be lead straight back to the lack of rejuvenation and holiday time for many employees.

Five Actionable Tips To Encourage Your Team To Take Their Holidays

1. Lead By Example – if you work all year, are stressed-out, and clearly need a break, then you are sending an unconscious message to everyone else that this is the behaviour you want them to mirror. A well-rested and rejuvenated leader sets an example for all the team.    Click to tweet. Take your breaks and reap the benefits of peak performance.
2. Make It Easy To Apply – create an environment that encourages taking accrued holiday leave. Avoid a rush on last-minute holiday requests by making it easy to apply for accrued annual leave and responding to requests in a positive way.
3. Keep the Conversation Alive – continually discuss the benefits of going on holiday with your employees and make them aware that any existing work will be divided fairly between other members of the team in their absence to prevent them worrying about returning to an overload of work. Ask everyone to send a postcard back to work from wherever they are and put this up on a noticeboard for everyone to see and talk about.
4. Incentives – try building employee incentives for taking regular time off and/or using accrued leave days. This could be the ability to leave an hour early or working a half-day. This will serve as a reminder to employees of both the benefits of working hard and the importance of taking personal time.
5. Shared Responsibility – give your staff a chance to discuss any challenges they have with taking annual leave. Is it a process issue, a fear issue, or do they just love being at work! Get to the bottom of it by asking the right questions so the appropriate action can be taken.

Once you take into consideration the financial, productivity, and performance benefits of employees taking their scheduled time off every year, encouragement of using up accrued annual leave seems logical. Not only is it beneficial to the individual with regards to their health and wellbeing, but it can also make all the difference to your business.

A well-rested employee is a more productive and happier employee, which has direct financial benefits to your company.