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Why employees who take the day off actually get more work done!

Why employees who take the day off actually get more work done!

Australian’s love a break from work. And what’s not to love – time off means family, friends, sunshine and an opportunity to recuperate. Whether they’re on annual leave, a public holiday or the great Australian ‘Sickie,’ Australians certainly do enjoy a day off.

However, media discussions on the subject tend to focus on negative aspects such as  ‘How much will any additional time off cost businesses and the economy in lost productivity?’ But this is a rather narrow minded view on the situation.

Yes, there is a cost to the organisation for every day off taken – but there are far more benefits than costs, both for the employee and the employer. In the final analysis, these benefits mean taking the day is a something that every business should encourage!

Benefits to employees

In addition to additional time to spend with family, unwinding and getting some well-deserved rest employees get several crucial benefits from time off.They return to work more enthusiastic and more satisfied with their job, and as a result they promote a more productive working environment. Employees who are tired and frustrated are far less engaged.

Benefits to employers

Employers who actively encourage staff to take regular annual leave are promoting a more productive and engaging working environment and will experience higher staff retention rates on average than employers who discourage time off.

Regular consumption of leave balances is also a cost saving measure for the employer, because annual leave accumulates in terms of hours, not a fixed dollar value. As employees gain pay raises while their leave time accumulates, the value of that leave time increases, often resulting in a much higher payout when it is finally claimed than if it had been taken at regular intervals at lower pay grades.  This is a compelling financial reason for companies to encourage employees to take their scheduled leave.

Additionally, from a tax perspective it is also important to remember that while the annual leave accumulated by your staff is an expense on the profit and loss statement in the year it relates to, it is not tax deductible until the amount is actually paid to the employee.

In Summary

Employers who fail to encourage their staff to take regular days off will experience lower staff engagement and retention, higher cost of employment and delayed tax benefits. On the other hand employers who insist on regular days off are in fact developing a more satisfying and productive working environment as well as saving their business money in the long run. Which type of employer do you want to be?!

Taking control of your Payroll

Employers in need of assistance with managing staff leave entitlements or broader payroll issues can contact Inspire CA for assistance.