How employers can encourage employees to actually take time off

Despite annual leave being a legal right for UK employees, many still don’t take all of it. Recent research found that just under 61% of workers didn’t use their full entitlement in 2023.

Time off isn’t a luxury and shouldn’t be viewed as such. It’s vital for wellbeing and helps people return to work with fresh focus and energy. Yet many workers continue to skip their holidays, often because of workload pressure, guilt or fear of falling behind.

That leaves employers with an important question. If people aren’t taking the time off they are entitled to, what can you do to change it? This article explores why unused leave is bad for both wellbeing and productivity, and how employers can help their teams take the breaks they need.

Why unused leave harms wellbeing and productivity

Skipping time off might seem harmless in the short term, but it takes a real toll on people and performance. When employees don’t take breaks, fatigue builds up and stress levels rise. As a result, they might experience poor concentration, make more mistakes, and ultimately become more vulnerable to burnout.

Many workers today find it difficult to fully switch off from work. Even when they’re on leave, it’s common to check emails or respond to messages. This “always-on” culture can blur the line between work and rest, leaving people feeling drained rather than refreshed.

From a business point of view, the impact is just as significant. Tired employees are less engaged and more likely to experience dips in performance or attendance. Over time, that can lead to reduced productivity and increased turnover, as people reach their limits and look for roles with healthier boundaries.

When employers actively encourage time off, they’re investing in a workforce that’s focused and ready to perform at its best. And when people genuinely switch off, they come back sharper, more motivated, and far better equipped to handle the demands of their role.

Understand why employees avoid taking time off

It’s important to understand the root causes why employees are not taking all their annual leave entitlement. Common reasons include:

• Lack of planning: Without clear handover processes, taking leave can feel disruptive.
• Workload pressure: Employees may feel they can’t take time away from their work.
• Company culture: If leadership rarely takes time off, employees may follow suit.
• Fear of judgment: Some employees may be concerned that they will be seen as less committed.

There’s no doubt that, done well, unlimited annual leave can have significant upsides.

The business case for time off

Encouraging time off isn’t just about employee wellbeing, it is good for business. Studies show that regular breaks from work:

• Improve productivity and creativity
• Reduce absenteeism and turnover
• Enhance employee engagement
• Improve working relationships

Ensure employees understand their annual leave entitlement

The statutory minimum holiday entitlement under the Working Time Regulations 1998 for full-time employees is 5.6 weeks (28 days) of paid annual leave, including public holidays. Employers may provide this or contractually give more holiday. Employers need to use the total holiday entitlement given to full-time employees to apply this pro rata to part-time, irregular or variable hours contracts.

Pay correctly

Out of the 5.6 weeks of paid statutory holiday entitlement for full-time employees (pro rata for part-time), 4 weeks must be paid at ‘a worker’s ‘normal’ rate of pay (as specified by Regulation 13 of the Working Time Regulations).

This could include regular payments, such as overtime, regular bonuses and commission. The remaining 1.6 weeks’ entitlement can be paid at ‘basic’ rate of pay, that is, the worker’s basic remuneration (as specified by Regulation 13A)’.

Keep track

Don’t forget to review how much annual leave your employees have remaining on a periodic basis and at least 3 months before the end of your annual leave year. If you are using a Human Capital Management (HCM) system then there should be the ability to create a report relating annual leave balances and break this down by departments, location etc.

Strategies for encouraging employee to take their annual leave

• Managers should lead by example. Ensure they don’t promote a culture of presentism by not taking time off.
• Track annual leave usage across your business.
• Regularly remind employees of their holiday entitlements and the benefits of taking time off from work. This could be email reminders, at 1-1’s or team meetings.
• Develop clear handover procedures so employees feel confident their responsibilities will be managed in their absence.
• Make booking annual leave easy.
• Managers should respond to annual leave requests promptly.
• Consider implementing a “use it or lose it” policy if appropriate. Note that employers can’t only rely on this type of policy. They must also act proactively (see below).

Know your annual leave policy and be proactive!

Whether you operate a ‘use it or lose it’ policy or permit some carryover of annual leave beyond the statutory minimum, employers must take proactive measures to encourage employees to take their time off and clearly inform them if they are at risk of losing any unused entitlement.

Relying solely on a holiday policy or contractual clause will not be enough. The employer must make every effort to ensure that employees use their annual leave entitlement before the end of the holiday year. If leave is not taken, and the employer hasn’t encouraged or informed the employee, they may be entitled to carry over up to four weeks of leave into the next year.

Note that there are some situations where employees must be allowed to carry over annual leave to the next holiday year i.e. employees on long-term sick leave, maternity/adoption leave.

Encouraging employees to take time off is about more than policy, it’s about culture. By actively promoting rest and recovery employers can build healthier, more resilient workplaces where people thrive.