The Importance of Annual Leave for Employees

Most countries in the world have laws that entitle workers to time off, ranging from a few days to several weeks. However lots of people (particularly senior staff members) will continually fail to use all their entitled days. But taking annual leave is vitally important for employees and not using leave can have a profound impact on the individual and your organisation.

The importance of annual leave.

We know not everyone takes the time off they're due. And, when they do take time off, it is typical that their laptops, smartphones and tablets join them on holiday. This means your staff will be checking emails at all hours, taking business calls by the pool and working on their laptops when they should be working on their tans.

This is a big problem, as they won’t fully switch off from work. Only by focusing fully on their holiday will they return to work energised, refreshed and focused. And this in turn will have an important impact on Employee Happiness AND Engagement.

The Stats

According to the Glassdoor Annual Leave Survey, the average employee will only take around 77 percent of their holiday leave. With the statutory annual leave days being 28 (inc bank holidays), we can work out that the average UK worker misses out on six-and-a-half days every year. Our 28-day minimum is among the lowest in Europe, where the average is 33 days, yet many are still failing to use all their days. This paints a clear picture that something must change.

When asked why they didn’t use all their entitled days, the most common answer was “Fear of falling behind [on their work].” (11% of respondents)

Other answers included:

  • Desire for a pay rise (10%)

  • Didn’t trust anyone else to do the work (9%)

  • Felt unable to disconnect (7%)

In another study, surveyed 1,000 workers to discover how much annual leave they are using:

  • 8% of respondents stated they missed out on more than 10 days’ annual leave.

  • When asked, “With your remaining holiday, what did you do?” – 35% of respondents replied, “Lose it all.”

  • When asked, “Why didn’t you take your remaining holiday time?” – 43% of respondents replied, “They were too busy.”

Your Staff Aren't Taking Holidays: How Does This Affect Them & Your Business?

I have never believed that vacations are luxuries. They are necessities-just like shelter, clothes and food, they make us feel like humans and not like animals that care only for survival.

Alexander Babinets

You may be thinking that if your staff aren’t using their annual leave then it is great for you and your business. After all, they will be in the office working on their assigned projects instead of spending time focusing on their personal lives. This means you don’t need to worry about finding cover, handing over work and worrying about deadlines not being fulfilled. Surely this will improve productivity and output? That is not the case.

A break from work will allow you and your people to switch off, de-stress, regain focus and re-energise. This is essential if you want to create a sustainable culture of engagement, productivity and happiness, thus reinforcing the importance for annual leave throughout your organisation.

Let's Examine The Impact Over-Working Can Have on Your Workplace

1. Higher Stress-Levels

Many studies suggest that taking time off from work will reduce stress and improve wellbeing. The American Sociological Association compiled a report which evidences this, “A larger number of vacations lead to a decline in the psychological distress of people.” The study highlights that work can be very stressful, and failure to take time off can create added stress.

This can lead to more serious conditions like depression, anxiety and burnouts. All of which will significantly affect wellbeing and work performance on a long-term basis.

2. Reduction in Creativity & Performance

Encouraging your employees to take holidays may not be at the top of your priorities list – but it should be. Taking a break from work helps us to concentrate on other parts of our lives, which results in a renewed focus when we return to work. Time Coach and Author, Elizabeth Grace Saunders suggests, “Whether it’s stepping away for a few hours, days, or even weeks before coming back with fresh eyes, breaks like these can help you problem-solve better than forced focus might.”

Managing Director of HR group, Penna says, “Evidence shows you become less productive without proper breaks. Even if people work longer hours, they’re not as creative and can’t maintain the same intensity level.”

3. Increase in Health Problems & Absences

When you and your people spend all their time in the office you are sacrificing more than just your social lives – your health is at risk too.

Workers who don’t have a healthy work-life balance can eventually become unwell. This can result in your people taking time off, but instead of relaxing on a beach, they are drinking Lemsip under a blanket. If you have people on short and long-term sick leave then you are still facing work absences – only this way people will come back happier and more productive. Considering the alternative, surely it makes more sense to encourage people to take time off?

Researchers from UCL collected data on over 600,000 workers on the link between working long hours and the risk of heart attacks. They did the same on the risk of strokes with a sample of over 500,000 workers. The study discovered that “Those who worked more than 55 hours per week had a 13% greater risk of a heart attack, and were 33% more likely to suffer a stroke, compared with those who worked 35-40 hours per week.”

What Can Neuroscience Tell us About The Benefits of People Taking All of Their Annual Leave?

Organisations might believe that allowing people not to use their annual leave will be better for their bottom line. But this is short sighted! Let's dive into why using neuroscience...

1. More Feelings of Safety

Balance is an important theme within Safety which drives happiness within the workplace. This might seem fluffy, but it's far from - if people don't feel safe within the workplace they'll be in their fight or flight response and therefore unable to perform to the best of their ability.

Ensuring your employees feel safe should therefore be a top priority for every organisation. Helping them switch of from the stresses and strains of work will help create balance and therefore promote feelings of safety within your team.

2. More Opportunities to Make Everyone Feel Appreciated

Acknowledgement is an important driver of employee happiness. Encouraging your team to take their annual leave shows them that you understand how hard they've been working and how important it is that they take a break.

Team handovers can also be an amazing way for managers to understand what an employee is doing on a regular basis and this can be useful for reviews and appraisals. Plus if you find that one person is always doing the closing shift it might be time to figure out if there's a more equitable way of spreading less desirable tasks or even rewarding an individual for their commitment.

3. More Connected With Their Why

We ask a lot of people what makes them happy. The most common answers we get are: spending time with friends and family, travelling, and good food. Guess what annual leave gives people a chance to do?

Neuroscience shows us that one of the key drivers of employee engagement is vision and values. For lots of people what motivates them at work is being able to also have quality time outside of work. That's why it's so important they can get away and switch off entirely. Reminding people why they're working in the first place is sure to have incredible effects on their productivity when they return!

Why Aren't People Using Their Annual Leave?

Clearly many UK workers are not using all their annual leave. What is not clear are the reasons why.

Below are some possible motives why your people are not using their entitled holiday days:

  • Heavy workload (too busy) – As previously mentioned, this was the top reason named in the survey. Your workers could have an intimidating inbox that is growing by the second and lots of unfinished jobs that require attention. They may feel like they simply cannot risk taking time off, as everything will build up in their absence and create even more work.

  • Not giving enough notice – Depending on your business, or the amount of staff you have – there may be times when you need everyone in the office. People may have been waiting for the right time to ask for their holiday, and now they may have missed their chance as they didn’t adhere to your notice period. Consequently, you are unable to sign off on their holiday.

  • Staffing shortages – Your people may not take annual leave due to staffing shortages and lack of cover. This is particularly an issue for SMEs. They may feel guilty about taking time off and handing over work to people who are already overloaded.

  • Too shy to ask for time off – This may seem a bit silly for most, but not everyone is confident enough to ask for time off. This reluctance to ask may be intensified during busy periods or periods where lots of other people are on holiday.

  • Relying on holiday roll-over – Some businesses have a system whereby a set amount of unused days can roll over into the next financial year. This means your people may tactically take less holiday than they are entitled to, so they have more the following year.

How Can You Encourage Everyone to Use All Their Annual Leave?

As an employer, it is important to encourage your people to use all their annual leave. Not only is this beneficial for their wellbeing and productivity – but it can also boost retention, engagement and your company culture. ON top of this it will make your more appealing as an employer, which will help you attract a bigger talent pool.

Here are some strategies to help ensure everyone uses all their annual leave:

1. Let Everyone Know That You Want Them to Take Holidays

It is essential that your people know you want them to use all their annual leave and you stress the associated benefits for them and the organisation. This will help to persuade them.

You can ask HR to keep tabs on people who run the risk of not using their days, send out reminders in email, posters or via the intranet, or even mention the importance in staff newsletters. In our office, we have an interactive wall where we can post photos from our holidays. This clearly demonstrates senior management’s favourable outlook on annual leave.

Some companies even make it compulsory for their staff to use all their days…

2. Educate Everyone on Your Holiday Policies

Are you convinced everyone is well educated on your holiday policies? If not, you should make it a priority. Everyone needs to know how many days they are entitled to, the required notice periods and have access to written evidence that no one will ever be reprimanded for asking for time off.

For clarity, it is advisable to have an accessible live document that shows which staff are on holiday. This will help everyone to choose appropriate dates and not request time off when people from the same team/department are off. For impact, everyone could also have access to a private document that shows how many days annual leave they have left. This can be sent out monthly, to serve as a constant reminder.

Regular reminders are useful as they will help prevent everyone saving up their days and requesting to use them all in the last few months of the financial year. This will be a logistical nightmare for everyone – especially HR and finance.

3. Take Away Unused Days

An effective way to encourage your people to take time off is to implement a “use it or lose it” system. This is the inverse of the holiday roll-over system where any unused days can be carried over into the next financial year. With this system, any unused days will be lost. This should encourage your workers to take action. Especially those who (quite rightly) can’t stand the thought of missing out on their entitlements.

4. Implement Employee Incentives

Consider building employee incentives for outstanding work that rewards the individual/team with time off work. Depending on the nature of your business or finances this can range from paid holidays to simply having an afternoon off or being permitted to stay in bed a few hours longer. This will not only encourage your people to work harder, but it will also highlight how much you value people taking time off from work from time to time. This may inspire everyone to use their annual leave.

5. Listen to Your Team's Concerns

If your team feels unable to take their annual leave it's important you know why. Understanding which teams are feeling over stretched, where managers are struggling to build trust within their team, and where policies are unclear is vital to ensuring people take their full leave entitlement. Always-on listening will help you understand concerns in real time. It may also be useful to have two-way feedback, so you can maintain anonymity but still provide your team with the resources and support they need.

6. Practice What You Preach

Finally, it is important to lead by example. If you are encouraging your people to take time off, but you haven’t had a day off since Christmas 2015 then how can you expect to be taken seriously? Not only does this send a conflicting message, but it also puts unfair pressure on your people to copy your working hours.

It is key that you and your people give just as much thought and attention to your personal lives, as you do with your working lives. This will help you find a sustainable balance.

By encouraging your staff to use all their holiday and switch off entirely during these periods you can reduce stress, boost focus and create a happier, more engaged and productive workforce.

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About The Happiness Index

The Happiness Index helps organisations measure the key employee engagement AND happiness drivers to power their people strategy.

Our unique platform offers the products, insights and tools to shine a light on your cultural health and empower management to drive thriving cultures.

Our neuroscience-based pre-built surveys measure the full employee experience - from onboarding to exit to empower and enable organisations to understand their people and create data-led action plans.


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