Updated: May 17
In most companies there is one aspect of annual leave that causes headaches for HR and management, every company has one, and if you don’t handle it right it can leave you with short-staffed, dealing with disgruntled staff, or even breaking the law. We’re talking about the end of your company’s holiday year. So here’s the lowdown on year-end, and our advice on making it run smoothly.
So what do we mean by year end?
In most countries there is a legal entitlement to a certain amount of holiday per year, in others employees are entitled to a certain amount of time off as a part of their contracts. Whether it’s a legal or contractual entitlement, that allowance is normally expressed as a certain number of days per year, with limited or no rights to carry it over to the next year. The date that holiday must be used by, and a new allowance becomes available, is your year end.
Year end problems
Many companies keep things simple by having their holiday year start on New Year’s Day, meaning that there are fewer dates to remember. Other companies, also trying to keep things simple, will use the end of their tax and accounting year for holiday calculations as well. Whether it’s at the end of the calendar year or on some other date, holiday headaches crop up yearly for many managers. There are two major reasons for this:
The last minute rush
Many employees keep holiday in hand, either planning to take time off later, or to allow for time off to deal with the unexpected. When the end of the holiday year approaches, this can mean that the majority of your staff have time off to take, in just a few short weeks. For many companies, this means that there is a spike in demand for leave just at the time a pre-Christmas rush adds extra customer demand.
The reluctant booker
Some employees never seem to take time off work. When the end of the holiday year draws near, these staff still have weeks left to take, which you might not be legally able to deny to them. Especially for a member of your core team, this could leave you with a vital role to fill for weeks at a time at the end of your holiday year.
Solving the headaches
There are some simple things you can put in place to ease the year-end headaches. First you can make sure that employees are kept up to date with how much holiday entitlement they have left, and how long they have left to take it. This means that staff can see exactly what their position is throughout the year. Using LeaveWizard’s online annual leave management software allows you to set up automated email reminders for all workers, keeping them informed.
Secondly you can change the culture around holidays in your organisation. This is especially key to counter the problem of reluctant bookers. Time off work has been shown to improve productivity, so the company benefits more from dedicated employees taking time off to relax throughout the year than from heroic staff always being in the office. Try to create a culture where taking leave is not considered shirking, and you will reduce the tendency to under-use holiday throughout the year.
Third, Think about how your rules can ease the problem. Employment laws may set the minimum holiday entitlements, but you are usually allowed to set rules as to when holiday can be taken. Think about rules limiting the amount of holiday that can be taken in the last month of the holiday year, so that the rush is at least spread out, or perhaps even requiring a certain amount of time off to be taken by an earlier point in the year. LeaveWizard has fully customisable rules, so that you can tailor them to meet your company’s needs, and will automatically enforce those rules as employees make applications for holiday, so you know the rules are being followed.
A tailored solution
Finally, think about whether you can remove the problem by moving away from a single year-end. Some companies, including major multinationals have taken this step. In essence the idea is to individualise the holiday year, rather than having a single cycle for the whole business.
One approach is to use the month in which an employee starts as the basis for their annual leave. This removes the need for pro-rata calculations, and spreads year-ends out. If you recruit in batches though, for example a regular intake of graduates each summer, you will still have a smaller version of the problem when that anniversary rolls around.
A second approach is to use the month in which the employee’s birthday falls as an individualised holiday year. This has the advantage of spreading the rush more-or-less evenly across the year. Breaking up your holiday year may seem like an increase in the admin required to manage annual leave, but LeaveWizard’s easy-to-use online interface makes it easy to implement customised rules and arrangements. Click here to start your free trial of LeaveWizard, and see how simple the end of the holiday year could be.