Following the spring budget announcement and the upcoming financial year this April, we’re running our #HealthandWealth campaign looking at the effects that financial wellbeing can have on employees, workplace absence, and leave.
With the cost of living crisis and economic uncertainty in the UK and the wider world consistently making headline news, it’s no surprise that many employees are taking their money worries to work with them.
In fact, a recent report highlighted that 8 out of 10 employees admit to worrying about money, and that it impacts their performance at work.
And when it comes to absence and leave in relation to financial wellbeing, there may be several knock-on effects for organisations.
Annual leave – without the holiday
If people are penny-pinching, they may be choosing to take fewer holidays off work as they’re unable or unwilling to spend money on a trip away, an activity or an experience. Rather than taking a day off to sit at home, they’re working instead.
This in turn could create a backlog of unused annual leave towards the end of the year, which organisations may struggle to manage.
Depending on the policies organisations have in place, this might mean having to carryover unused holidays into the new year, provide payment in lieu of unused leave, or the employee loses their remaining holiday entitlement unless they use it all before the end of the year.
At edays, we know that organisations face a challenge with leave build-up anyway, with the average leftover entitlement at the end of 2022 coming in at 4.8 days.
Unused holidays often create a resourcing problem – as the end of year rush to use up annual leave means that many employees will be requesting leave around the same time as everyone else. Typically, the summer school holidays and the festive period are the most popular times of year for booking holiday, so organisations must be prepared for an influx of annual leave requests.
And, if people are using less of their holiday entitlement because they are watching what they spend closely, they may be starting to feel the strain of working consistently for weeks or even months without taking the rest that they really need – leading to burnout.
Organisations might also see a rise in presenteeism as a result – a workforce that is continually present but far less productive, because they’re in a need of rest and recuperation.
To address these issues, organisations could consider the following:
- Encourage people managers to monitor their teams’ annual leave patterns – have conversations with any individual who hasn’t used their leave entitlement for some time and support them to do so
- Instill a positive culture surrounding leave – work with the senior team and your people managers to remind employees to take their annual leave in order to boost a healthy work-life balance
- Approve leave requests on a first come, first serve basis – to avoid resourcing issues during the ‘end of the year rush’ when everyone wants to use their remaining holiday, approve requests in the order they come in
- Consider flexible bank holidays – in the UK many organisations offer bank holidays as part of their annual leave allowance, with religious occasions such as Easter included as part of this. Allowing employees to choose when they’d like to use these days however, offers greater inclusivity and flexibility.
A lack of financial wellbeing may also fuel absences
That’s the equivalent of £626million in lost output!
If employees are feeling the financial pressure of the cost of living crisis, coupled with not taking regular holidays throughout the year, they may be forced to take more unplanned absences from work due to stress, poor mental health or other types of sickness.
It is inevitable that employees will suffer sickness from time to time, but if they aren’t taking frequent breaks from work and are feeling the added financial stress, their absence rate may rise as a result.
For organisations, striking the balance between maintaining productivity whilst also encouraging a healthy work-life balance and a positive culture surrounding leave is crucial for a healthier, happier workforce.
In order to cut absence costs and improve financial wellbeing for employees, organisations could consider the following:
- Review your employee benefits package – perhaps add a wellbeing element to support employees
- Offer enhanced flexibility – allowing employees to change their working hours or location could help to cut costs on commuting
- Have open conversations – encourage people managers to address any concerns with their teams
Understand your absence and leave patterns with edays
With edays, streamline your entire approach to absence and leave with one, configurable system.
View and track employee annual leave usage, to see how much has been used and how much remains, and create custom leave types to include any additional types of holiday you offer.
Record and track employee absences and the reasons behind them, so you can intervene and take proactive steps to support individuals if needed. Utilise our platform’s wellbeing tools, including NHS guidance, to share with employees who are off sick – and include a link to other wellbeing resources you offer.
And get a clear picture of your organisation’s absence rates, to understand how absence is truly impacting your business.
In fact, using edays can reduce your admin time spent on absence and leave management by as much as 87.5%, and reduce your absence rates to save you £168 per employee per year! So you can look after your employees’ financial wellbeing as well as that of your organisation.