Iconic, low-cost Irish airline Ryanair had a fiasco on their hands just recently. The mismanagement of their pilots’ annual leave left them with a shortage of pilots - not enough to cover their scheduled Autumn flights. This led to a massive cost blow-out, reported to be in excess of seventeen million pounds - not to mention an embarrassing blemish on their brand image.
‘Always Getting Better’? It didn’t look that way, to the pilots, or customers.
Ryanair’s cancellation of hundreds of flights after it admitted ‘messing up’ the planning of its pilots’ leave, makes you wonder. How many more of us who are running businesses could easily fall into the same pit of mismanagement, leading to who knows what consequences?
The management and occasional confusion of annual leave can be a simmering mess that quickly reaches boiling point if not enough time is spent on planning. And for those of us in small business, it’s even more crucial to pay attention. The smaller your team, the bigger the impact.
And yet, studies released by Roy Morgan Research show that Australia’s full-time workforce has accrued a total 123,510,000 days of annual leave. That averages out at just under 21 days’ leave for each full-time worker. The research indicates that certain industries have a higher level of annual leave accrued than others, with those employed in wholesaling accruing an average of 25 days each.
Allowing employees to accrue excessive annual leave in such a way has its cost. So does the approach of not taking care to spread annual leave over the course of the entire year.
Big leave balances are expensive. Why? Because untaken leave is a recorded liability. That’s a big problem. But let’s also keep in mind the purpose of leave in the first place – to prevent burnout! Leave is there to have a positive impact to the mental and physical health of your employees. And that’s a win for you – because it yields greater productivity and a more engaged workforce when they return. Bonus!
Maintaining best practice for annual leave is certainly clever business practice. Here to help you get it right is a quick Do and Don’t Guide on how to get your annual leave planning right first time.
- encourage your employees to submit dates for annual leave as far in advance as possible.
- review employees’ leave accrual regularly and discourage accruals greater than 6 weeks.
- send reminders to employees on outstanding accruals - anything approaching 4 weeks should be planned for and discussed.
- speak to employees who have not taken any annual leave nor requested dates for leave - as a matter of urgency.
- ensure that your employees’ annual leave is planned for in such a way that the business has adequate cover at all times – and keepyour planes in the air.
- be proactive in the management of annual leave - this is not a topic to leave at the bottom of your to-do list.
- leave annual leave allocations to chance.
- take the view that it’s up to your employees to decide whether or not they choose to take leave.
- wait until the year end before reviewing annual leave accruals.
- give in to requests for payment in lieu of annual leave.
- make employees feel guilty about taking annual leave.
Managing annual leave certainly has its challenges but so do the scenarios that develop if you allow things to get out of hand, or plan badly. With transparency, good communication, forward planning and a culture that values leave taking, things can run a whole lot more smoothly - and with luck there are flights available to your employees’ chosen holiday destinations.