Unused annual leave? It's time for an HR vacation

Are staff taking necessary breaks from work? It seems not…

Unused annual leave? It's time for an HR vacation

It’s that time of year again – time to figure out what to do with all the excess unused leave. The upside of 2021 is some countries have finally reopened for tourists – meaning employees can use up their paid time off on a well-deserved vacation. While it’s not ideal, the mindset that annual leaves are meant for travel has remained for many workers. It’s likely shifted slightly since remote working became a norm, and professionals have learnt to take days off to rest, but there’s still much to do for HR leaders aiming to empower employees to refocus on personal well-being. HRD investigated the issues around unused paid time off (PTO) and what HR leaders can do about it.

Read more: Use it or lose it! How to encourage taking PTO

Are staff taking their paid time off?

According to a recent Expedia study, employees used five fewer days of annual leave in 2020 compared to the amount they normally took pre-COVID. The survey found that employees only took an average of 10 vacation days in 2020. While they’ve taken fewer days off, employees in Singapore especially expressed a greater longing for the return to travel more than anyone else in the world (90%). Employers have also been more accommodating of their desire to travel. According to the study, 67% reported that their employees have been supportive of them taking time off, up from 60% in 2019 and 55% in 2018.

Read more: WFH staff enjoy better work-life balance – but don't expect breaks

An HR issue that predates the pandemic

Expedia’s study may suggest that the issue around unused PTO is something unique to the pandemic. However, there have been countless global studies that proved otherwise. Research in 2019 by Lee Hecht Harrison Penna, for instance, found that workers weren’t using up all their holiday allowance. By the end of 2018, most employees had more than a week left over. After interviewing over 2,000 staff, the report highlighted a serious problem around presenteeism in workplaces. Just 28% of employees had used up their entire allocated annual leave by November – leaving 72% of staff with owed days off.

Read more: Singaporeans drowning in hours of unpaid overtime

What can HR do?

To find out what HR leaders can do to enable a mindset change and empower staff to disconnect from work, we spoke with Shubha Shridharan, group SVP HR – APAC at The Adecco Group. As a principle, Shridharan said that Adecco’s leaders don’t believe in enforcing the use of paid time off. “We believe in empowerment,” she told HRD. There are situations where the organisation sets guidelines for employees and leaders to follow, but for most things, including the use of annual leave, they give the onus and flexibility to employees.

However, she acknowledged that “some habits are difficult to change”. Whether staff are fully remote or based out of the office, there are bound to be individuals who are overly focused on work and fail to practise boundaries or take a break from work. This is when HR and leaders should invest in efforts to enable a culture focused on well-being.

“It starts at the leadership levels,” she said. “We tell our leaders that they need to press the pause button. They need to take some days off, put on their ‘out of office’ and say that they’re going away for a holiday.” That doesn’t have to mean a staycation or involve any sort of travel. Adecco’s senior leaders have embraced this practice, and some have sent out “interesting” ‘out of office’ messages. This sends a clear signal to team members about what they can and should be doing for their own wellness and balance. Shridharan shared that she’s seen a message that said: “I’m going to be spending time with my family and using my holiday leaves. I hope you will do too.”

“It’s a simple but very powerful message,” she said. “When people see that, they’ll think, okay, regional presidents and senior leaders can do it, so can I. In some ways, we are also implicitly encouraging our people to go into [rest] mode.”

Read more: Why leaders should take a 'mental health day'

Alternative to forced company holidays

While leaders role model the right habits and culture, HR can tap on other initiatives to help employees energise and engage better at work. Adecco has a long list of initiatives under a program called Adecco Cares that’s likely practised by other companies as well. This includes advocating shorter meetings for employees to take necessary breaks, and ‘free Fridays’ where they stop sending emails by 4pm, so that staff can “wind down” and get into weekend mode sooner.

Shridharan also shared an interesting alternative to help employees use up their annual leave allowance. The Adecco Group’s Singapore office implemented a voluntary initiative called the annual leave donation drive. The drive, which ran in July 2021, saw 95 days of donated annual leave converted to funds for SPD, a local charity organisation serving people with disabilities, and Singapore Children’s Society.

“This was purely on a voluntary basis – we shared the purpose behind what we were doing and got insights and inputs from our people,” she said. “Very happy to tell you that we had overwhelming response for the drive. Several employees, even if they had planned for something [with their PTO], when they heard about this they [offered] one or two days. And then of course, there was a good majority who didn’t know what to do with their [excess leave].”

She shared that in our times, while it’s critical to empower employees to manage their well-being, you can also engage staff by connecting them with a broader purpose. “As human beings, we all would like to do something good and something bigger than [about] the limited aspects of what’s in it for me,” she said. “If you look at a lot of research and studies, for the majority of people, giving back in whichever form or shape gives them a huge sense of gratification and fulfilment.”

Regardless, whatever leaders decide to manage issues like excess annual leaves, Shridharan reminded HR to be genuine and focus on the purpose of the initiative. “I want to highlight that all of these initiatives that we’re executing…should be based on sincerity,” she said. “I feel that corporate social responsibility or any of these efforts should not be a tick-in-the-box exercise. It should be connected to your purpose.”

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