Revealed: Backlog of Unused Annual Leave Could Cost Businesses up to £250,000

June 2, 20203min

New research by InstantOffices reveals that UK businesses are likely to face a huge backlog of annual leave requests that could cost businesses more than £250,000, more than 8.5 million people ate currently furloughed at home.

With restriction easing as we head into the second half of 2020, too many employees may request annual leave at the same time posing a risk for most businesses.

According to the calculations by InstantOffices, the cost for companies to pay staff for a minimum of two weeks of annual leave which is outlined in the table below:

The figures are based on the average UK salary and just 50% of leave owing.

Paying out 10 employees could set the business back for more than £10,000 while an SME of 250 employees could face up to £250,000 in costs.

For a small company, paying out 10 employees for only half of their annual leave days could set the business back more than £10,000, while an SME of 250 employees faces up to £255,500 in costs.

With the working population in the UK returning to work, this is one of the businesses’ key concerns, while the government is looking at several ways to assist almost 6 million businesses who might be affected.

Lucinda Pullinger, Global Head of HR at The Instant Group, says: “In addition to the financial challenges, there is a huge wellbeing element here too. Just because we are unable to take the destination holidays we hope for, it doesn’t mean we don’t need a change of pace. The need for a break from work has never been higher. The pressures of Covid-19 on some people are extreme, and protecting mental health is key right now. Taking a break, even if that break is at home under lockdown, is still beneficial, and employers should encourage employees to take their holiday to protect their wellbeing, not just for financial reasons.”


Sandra Radlovacki

Sandra Radlovacki

Sandra Radlovacki is Assistant Editor at Customer Experience Magazine.




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