Managing annual leave

Often than not, employers tend to consider annual leave as an inconvenience. However, if planned and managed well, annual leave can have positive effects on the company and its employees.

Annual leave isn’t just about employees being away from the work place. It should serve to:

  1. inspire and boost creativity

Change of scenery rather than sitting at the same desk on a daily basis can be a perfect opportunity for employees to encounter new experiences that may inspire them to see and think about things differently.

  1. encourage taking less sick absence

Employees who take annual leave at regular intervals have the chance to re-energise themselves more often and thus, are less likely to get sick. Employees who work at a stretch without taking a break are more susceptible to stress and also, more prone to making mistakes. A well-rested, refreshed employee will increase productivity and significantly decrease the risk of accidents at the workplace.

  1. allow work to be planned better and sustain productivity and output

Employees who plan their leave in advance are less likely to take unscheduled or unplanned leave. Having a leave policy, which sets conditions on how and when leave can be taken will ensure work continuity throughout the year.

  1. boost staff’s morale

Feeling energized and rested helps in improving employees’ morale and his/her inter-relations with colleagues.

  1. improve the employer brand

Apart from valuing employees, an effective leave policy can help employers gain a positive reputation amongst existing and prospective employees.


Introducing a leave policy that clearly defines how, when and the procedure to be followed when applying for leave, will provide management with an important tool to anticipate and plan the year.

The policy should clearly explain that the company promotes and supports a work/life balance.  It should include the the employer’s commitment towards annual vacation leave  and also any legal provisos.  It should also promote the importance of taking leave throughout the year and setting the rules and criteria outlining when an employee can or cannot take annual leave.

Ideally, the policy should also include an amount of flexibility, which also allows for short-notice leave requirements. Staff members appreciate such flexibility – it is in itself a form of work/life balance as certain emergencies or last minute leave necessities are realities we experience.

Thus, the policy and procedure needs to:

  • Describe its scope;
  • Explain the process of requesting and authorizing leave along with leave forms required when applying;
  • Identify who is responsible for approving one’s annual leave;
  • Provide clear information on any conditions (example: each employee is to take 5 consecutive days of leave per year or that only 32 leave hours can be availed of in the last quarter of the year); restrictions in timing of leave (example: stop leave periods) and whether leave can be accrued (example: a maximum of 48 hours can be transferred automatically to the first quarter of the following year);
  • Explain who monitors and reviews annual leave usage (staff members will most certainly monitor their leave regularly and will need to know who to refer to if they have any queries).

Like any other policy, it is important that there is cross-referencing, if need be, with any other policies which are in place such as policies related to sick leave, maternity and flexible working.

Whilst managing annual leave means encouraging the team to take annual leave, it also shows employees that availing of such leave is necessary for them and also for the business.

Happy employees are the most productive. Encouraging employees to enjoy what they are entitled to will only ensure reciprocal respect and a more positive and productive working environment.

About the author

Maria Bartolo Zahra is Managing Director and HR Advisor at SurgeAdvisory. She has over fifteen years of human resources and business advisory experience.