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Whether it’s to buy Christmas presents for the family, go to their children’s school play, or they simply want to use up the remainder of their annual leave, almost everyone within a business wants some time off during the Christmas period.

Naturally, those within HR need to manage these multiple requests so that during the festive period, your company can still operate, even with the increase in annual leave requests. In this blog post, we’re going to look at the most straightforward ways HR teams can ensure that dissatisfaction doesn’t set in within your employees when it comes to spreading the festive cheer of holiday leave.

Before we start, let’s look at the law:

Under the Working Time Regulations, all employees are entitled to a minimum of 5.6 weeks of holiday in each annual leave year. Provided the employer does not ultimately prevent an employee from taking this leave over the year, the employer must determine the rules regarding when leave can be taken.

Some employers will specify set periods of shut down where leave must be taken, such as Christmas, whether in relation to all or part of their employees’ annual leave entitlement. Under regulations, this is perfectly permissible provided the employer gives twice the length of the leave period to be taken as notice to the employee.

Moving on, let’s look at the seven best examples of how to ensure you have a stress-free December when it comes to booking holiday for your employees:

Make sure you start with a company holiday policy:

A bespoke annual leave policy that clearly states your company’s approach to leave over the festive period will allow you to clearly, and easily engage workplace expectations over the festive period.

Within the policy, make sure you:

• Establish your company-wide approach to annual leave.
• State what restrictions are in place and why.
• Explain what deadlines there are for holiday leave.
• Explain what, if any, shutdown days you will be operating.
• Explain what the carry-over policy is for your company, if applicable.

Be fair to everyone, and implement a first-come, first-served basis for holiday requests:

Instead of having to juggle multiple requests at once, a simple solution would be to offer the available annual leave spaces on a first-come, first-served basis as this will be the fairest way to manage the situation. If you employ a lot of parents, for example, you’ll likely see many of them requesting annual leave to coincide with the school holidays, so this approach will give your HR team a fair and straightforward policy to implement.

If you adopt this approach, make sure you indicate this in your holiday policy, so all your staff know they need to request leave dates as soon as possible.

If you’re struggling to get to grips with the – at times- head-ache-inducing calculations when calculating holiday pay, why not try our part-time and zero-hour contract worker holiday entitlement calculators?

Be fair but firm (and be underpinned by policy):

Aside from full shutdown days, you’re always going to need a minimum number of employees working at a given time to be able to function as a business. If this is the case, you could set limits on how many people can be on holiday from a certain department at any time, so you can be sure you’ll always be adequately resourced.

Again, you must make your staff aware that this is the case and that they may need to work their annual leave dates around their colleagues.

Be clear on any time frames where no leave will be permitted:

If you have a particularly busy period – such as Christmas – when you need an entire workforce, you can restrict staff from booking leave during this time. You may also want to consider a restriction in the first week of January so that all your teams can catch up with work missed due to the increased amount of annual leave taken in the previous weeks.

As with the previous points, make sure your employees are aware that this is your approach in your policy.

Specify any days when a holiday must be taken:

Alternatively, perhaps your business shuts down on public holidays, such as Christmas Day as well as New Year’s Day, and all your staff will be required to take those days off due to the business being shut. 

If that’s the case, you’ll want to use your holiday policy to indicate to staff that they will need to reserve some of their annual leave allowances during this period.

Be clear about what the company is doing over the Christmas period:

Make sure everyone is clear about exactly when and how the business will be operating over the Christmas period. Are you going to finish early on Christmas Eve, or will everyone be expected to work a full day? Will it be business as usual over the period between Christmas and New Year or just a skeleton service?

If you are closing down entirely over Christmas and New Year, are these being given as additional holiday days in addition to people’s usual entitlement, or will they be expected to take them out of their annual leave? If everyone knows the score, there is less potential for confusion within your workforce.

Make sure you’re following the law:

Refusing holiday requests, changing leave that has already been approved or insisting employees take a holiday at a time that suits your organisation can easily create tension and could adversely impact the working culture of your organisation.

As an HR professional, you must ensure your organisation follows the rules. For example, if your business decides to close over Christmas and you need your employees to take time off, you should tell them at least twice as many days in advance the number of days you want them to take off.

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The post Everybody wants to book time off simultaneously over the Christmas period – what should HR teams do? appeared first on Natural HR.

According to legislation from the UK Government, (almost) all workers who work a 5-day week are entitled to at least 28 days of paid annual leave per year. Equivalent to 5.6 weeks of holiday, employers can opt for a leave year or accrual system when calculating their employees’ holiday entitlement.

Below we will explore the UK holiday entitlement system and provide a few handy holiday accrual calculator methods that will help you work out employee holiday entitlement.

What does the leave year system mean?

Under the leave year system, employers define their annual leave year during which employees may use their allocated annual leave.

Naturally, not all new starters commence their employment on the first day of an employer’s leave year.

If an employee starts part of the way through a leave year, you can calculate holiday entitlement on a pro-rata basis depending on how much of the leave year remains.

For example, a worker who works 5 days a week has entered your employment 3 months into your leave year, and your holiday entitlement is 28 days.

28 / 12 x 9 remaining months = this employee’s holiday entitlement is 21 days.

What does the holiday accrual system mean?

The holiday accrual system does what it says on the tin. Every month that an employee works, they accrue 1/12^th of their holiday entitlement. The Working Time Regulations 1998 allows employers to use an accrual system to work out how much holiday leave a worker has built up during their first year of employment.

For example, a worker who works 5 days a week has been in your employment for 6 months and your holiday entitlement is 28 days.

28 days / 12 x 6 = 14 days of annual leave entitlement for the 6 months they have worked for you.

In the second year of their employment, workers that have been subject to an accrual system will then be entitled to all of their holiday allowances on the first day of the new holiday year.

How to work out holiday entitlement for new employees

Whether you’re calculating holiday entitlement for new starters or leavers; the process is a relatively simple one. Of course, the specifics of how you work out holiday entitlement will vary according to your company’s employment contract.

You either calculate this monthly, as detailed above or by the actual working days remaining in the holiday year.

To calculate holiday by the actual (i.e 365 days or 366 in a leap year) days in a year, simply work out the number of days between an employee’s start date and the end of the year. Then divide this number by 365 (or 366).

If an employee starts on 1^st September, there are 121 days between their start date and 31^st December. Assuming your holiday year runs from January to December.

Simply divide 121 by 365 (or 366) and multiply by 100 to arrive at the percentage of full holiday allowance this employee is entitled to.

121 / 365 = 0.33 x 100 = 33%

If your holiday allowance for a full year is 28 days, this employee’s entitlement is 33% of 28 days which is 9.24 days.

By law, you cannot round down the leave. It is at an employer’s discretion whether you round it up or not, but in this case, you may choose to round up the 9.24 remaining days to 9.5.

Alternatively, you can calculate holidays by the days an employee physically works in a year (i.e. 260 days). Simply work out the number of working days between an employee’s start date and the end of the year. Then divide this number by 260.

If an employee starts on October 1^st, there are 64 working days (excluding weekends and 2 UK public holidays.

Divide 64 by 260 and multiply by 100 to arrive at the percentage of full holiday allowance for this employee.

64 / 260 = 0.25 x 100 = 25%

If your holiday allowance for a full year is 28 days, this employee would thus be entitled to 25% of 28 days which is 7 days.

How do you work out holiday entitlement for leavers?

Assuming an employee’s holiday entitlement is 28 days per leave year, and an employee is leaving 90 days into the holiday year, you can calculate their entitlement using a similar formula to that of new starters.

To calculate holiday entitlement by the actual (i.e 365 or 366 days) days in a year, work out the number of days between the start of your holiday year and an employee’s leaving date. Then divide this number by 365 (or 366).

For example, if an employee’s leaving date is 31^st March and your holiday year starts on 1^st January, there are 90 days between these two dates. Simply divide this by 365 and multiply by 100 to arrive at the percentage of full holiday allowance entitlement for this employee.

90 / 365 = 0.25 x 100 = 25%

Assuming your annual holiday allowance is 28 days, this employee would have been entitled to 7 days. This is 25% of 28 days.

Bank holidays and any holidays already taken should be deducted from the 7 days they have accrued.

If any holiday entitlement remains, this should be paid with their final pay.

Equally, if the departing employee has taken more holiday than the days accrued, employers can reclaim these days as a deduction from their final salary.

You can also calculate holiday entitlement for leavers by the number of actual days worked (i.e. 260 days).

If an employee is leaving on 30^th September, they have worked 191 days so far this year. This excludes weekends and 4 UK bank holidays.

Again, simply divide this by 365 (or 366) and multiply by 100 to arrive at the percentage of full holiday allowance this employee was entitled to.

191 / 365 = 0.52 x 100 = 52%

If your holiday allowance for a full year is 28 days, this employee would have been entitled to 52% of 28 days which is 14.5 days.

How to calculate holidays entitlement for part-time workers

The calculations listed above are for the typical employee working 5 days a week. To calculate holiday entitlement for part-time workers, the formula is based upon the entitlement provided by the government. This is the equivalent of 5.6 weeks of holiday for every worker.

As with full-time workers, part-time workers are also entitled to the equivalent of 5.6 weeks of paid holiday (pro-rata in proportion to the number of days they work).

If an employee works 3 days per week, their entitlement is at least 16.8 days of annual leave per holiday year (3 days x 5.6).

How can you calculate holiday entitlement for hourly paid or shift workers?

Employees that are paid hourly or have no set hours of work (i.e. employees with a zero-hour contract) also qualify for the equivalent of 5.6 weeks of paid holiday. In proportion to the number of hours they work.

Employees with variable working hours accrue holiday at the rate of 12.07% of the hours they have worked. (That is: 5.6 weeks / 46.4 weeks (i.e. 52 weeks minus the 5.6 weeks an employee is on holiday) x 100 = 12.07%.

Therefore, if an employee has worked 25 hours in one week, they will have accrued 3.01 hours of holiday.

Do you need help calculating holiday entitlement?

We know just how headache-inducing calculating holiday entitlement can be. That’s why we’ve made it simple with our HR software. Automatically calculating holiday allowances for new starters and leavers, Natural HR makes these tedious calculations a thing of the past. Get a free demo to find out how you can ditch these calculations for good.

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The idea is that the organisation trusts each employee to manage their own leave requests and to take as much or as little as they want, when they want it. No tracking, no allocated days, just take a holiday when you want to.

It may sound like a joke… but it isn’t.

Could this new idea really be introduced into every organisation? Would it work in every industry? Here are 6 pros and cons if you were to adopt an unlimited holiday policy (well, no policy really!)

Pros

1. Your employees will be happier

We all know that happy employees are more productive. This is one of the many reasons companies like Netflix and Virgin introduced an unlimited holiday policy. This flexible benefit boosts employee morale and improves workplace culture.

Today, there is more pressure than ever on companies to help employees better manage their work-life balance and personal well-being and unlimited leave is just one way to achieve these.

2. Retaining top talent is far easier

According to The Balance Careers, a reasonable leave benefit is one of the top perks that an employee wants. Research from Small Business Prices also backs this up with 26% of all employees wanting an additional holiday.

Offering unlimited holiday could be the difference between a top candidate choosing you over a competitor – especially if the salaries on offer are similar. It could also be the USP on your job advert, meaning more candidates view your role over others, putting yours firmly in the driving seat.

3. Productivity is higher

Research conducted by recruiter.co.uk shows employers who offer an unlimited holiday to employees could see a reduction of sick days by up to 50% and a 10% decrease in staff turnover. An unlimited holiday policy will also promote quality over quantity. Almost overnight you’ll eradicate the clock-watching attitude, and consider an employee’s overall contribution rather than just their presence in the workplace. After all, it’s the quality of work produced that defines success for a business.

Cons

1. You have to be very trusting

Don’t trust your employees? Don’t bother. The only way an unlimited holiday policy works is if you can really trust your people. It’s also true the other way around, as Edelman Trust data showed that almost one in three employees don’t trust the company management. This divide needs to be addressed before considering any new holiday policy.

2. Expectations aren’t clear – abuse or burnout

This may be due to unlimited holiday still being a fairly new idea and people are still in the ‘old’ mindset where they are unsure when and how much holiday to take. Knowing the numerical limits can help define what is acceptable behaviour.

While one person might want to take 15 days off in a year, another team member may feel they need 35. This is fine under the policy, but when one person is away, their work still needs to be covered and it’s the person who takes less holiday who picks it up. This can result in burnout for that person and may require the business to employ additional people, thus increasing costs.

But there will always be that one person who will abuse the policy, taking far more days than is needed resulting in lower productivity, but with no repercussions.

3. Negatively viewed for taking days off

Being viewed negatively for taking days off is probably the biggest contributor to employees not taking enough annual leave. Research by Croner House showed that 13% feel they can’t take a day off and four percent worry about what their place of work would think of them if they did. The research also showed that 33% of people said they didn’t take all their annual leave due to the amount of work they have to do. This would only increase with an unlimited holiday policy.

Finally, ‘unlimited’ doesn’t really mean unlimited, it really means, ‘we’re not counting’.

So, could an unlimited holiday policy work for you?

It’s time for the million-dollar question, should you introduce an unlimited holiday policy into your business? Ultimately, it depends on what you want to achieve and what your employees want. For example, a gaming company may employ numerous millennials who prefer additional benefits over pay rises, however, a tool manufacturer may have an older workforce who only care about their take-home pay.

Before you implement any new policy, always gain feedback from key stakeholders and have a trial run to minimise the chance of failure.

Looking to better manage your employees’ leave? Natural HR will allow employees to self-serve time-off requests and give managers a simple approval process. If you want to know more, we have a whole page dedicated to our features.

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