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Guide: Planning annual leave for shift workers

Getting rid of holiday headaches…

The summer holiday season poses a number of challenges for organisations. Many are required to operate at the same level of productivity but with less resource to draw upon.
Furthermore, many shift workers prefer to take their annual leave during the summer months which may coincide with peak levels of demand.
This guide:
● Identifies common issues in holiday planning.
● Evaluates gross and net hours’ holiday systems.
● Provides guidance on accommodating shift workers’ annual leave whilst maintaining productivity levels.

How annual leave is allocated

Employment contracts typically specify the number of hours a shift worker is contracted to work, how many annual holidays and public holidays they are entitled to and when the employee is expected to provide those hours. Some schemes are characterised by holidays-on-request arrangements (gross hours’ systems) whereas others allocate employees fixed holiday slots in the calendar at the beginning of the year (net hours’ system).
Gross hours’ systems don’t often build holiday cover into shift patterns, rotas and rosters and, where they do, it usually creates unacceptable costs, service issues or reduced productivity levels. In many shift work organisations, significant management effort is spent firefighting to cover holidays; especially during popular holiday periods.

Summer holiday challenges:     

  • With traditional holidays on request gross hours’ systems there is a perception that people have more choice than they do.
  • Effect on morale if shift workers are denied time off.
  • Productivity needs to be kept at the same level with a smaller workforce or temporary staff who are usually less skilled and arguably less committed.
  • Over-reliance on costly overtime.
  • Organisations may have their peak demand in the summer, further exacerbating the problem.
  • Holiday requests can become concentrated if the end of the company holiday year coincides with the busiest holiday period.
Gaps in labour provision typically generate high reliance on overtime and agency staff, poorer quality of output, employee stress and breaches of Working Time Regulations or health and safety legislation.
Rather than viewing overtime as a temporary measure to overcome exceptional circumstances, many managers of shift workers use it to cover shortfalls created by employee annual leave.
The excessive hours often worked in order to cover holidays can negatively impact shift workers’ health, wellbeing and morale and are bad for organisations’ productivity, performance and profitability.

Administration and annual leave

In many shift work organisations, a significant amount of valuable workforce management time is often spent dealing with annual leave requests and arranging resource to cover gaps in shift patterns, rotas and rosters.
In general, gross hours’ systems require significantly more administration in relation to annual leave entitlement.
For example:
  • Calculating entitlement – accruals, long service etc.
  • Operating rules.
  • Authorisation.
  • Organising cover.
  • Cancelling.
  • Monitoring/tracking/checking.
  • Payment (they might not be paid at standard rates of pay).
  • Notification of forthcoming year and the possibility of losing holidays if they are not taken.
  • ‘Double management’ – e.g. carrying holidays forward to the next calendar year and ensuring they’ve been used.
Below is an example calculation illustrating the potential hidden cost of managing annual leave:
  • 1. Employee: Getting form, checking with colleagues as appropriate, filling it in, chasing it up = circa 30 minutes per request
  • 2. Supervisor: Checking form, checking spreadsheet, requesting info on T&A, authorising (or dealing with fall out) = circa 30 minutes per request
  • 3. HR / T&A / Ops Manager / Other: Further support, liaison or approval = circa 30 minutes per request
Each holiday request = 1.5 hours of man time
If you spread this across the year and a typical 25 days per annum holiday allowance (booked as 10 requests – 1 x 10 days, 1 x 5 days, 2 x 2 days and 6 x single days) this equals 15 hours man time per employee, per year.
For every 100 staff this equates to 1,500 man hours per year…or one full time employee!

Arrange a session with one of our experts where you can discuss the challenges you face and talk in broad terms about potential solutions and next steps.

Gross hours’ systems and Demand-Led Rostering

In many organisations, a significant amount of valuable management time is often spent dealing with annual leave requests and arranging resource to cover gaps in labour supply.
By far the largest disturbance to labour supply in traditional models of working derives from holiday taking, which can account for between 10% of total working time available depending on the environment.
A key benefit of adopting demand-led rostering is that provision for holidays can be made within the pattern of work. Regular weeks off will occur as part of the pattern, often at a rate of one in four, five or six weeks over a period of time.
Each employee knows exactly when they are going to be off and can plan accordingly. Rostered holidays enable organisations to ensure they have adequate cover and skillset throughout the year allowing for consistent productivity levels. Organisations can plan for peaks and troughs in demand by organising the annual leave around these periods and reducing the amount of holiday delivered through the roster at a peak or busy time.
In a gross hours’ environment, when managers are looking for appropriate holiday cover, they are tasked with covering the same skills and competencies as the person on holiday. In some cases it can be difficult to achieve this which can impact business performance and demotivate other team members.
Whereas within a net hours’ model, teams are designed around the optimum number of people required to run the operation. While this can still be affected by unplanned absence and training it won’t be affected by annual leave.

Gaining employee buy-in

This concept and the associated perceived lack of choice of holidays might lead to initial problems of acceptance by employees. However, the experience of many organisations is that once the system has been implemented, there is widespread understanding and appreciation, with few employees preferring their previous regime.
Careful explanation and presentation of these ideas is essential to achieving understanding and buy-in. Employees can be offered liberal shift swapping arrangements and a choice of the pre-scheduled holiday periods to mitigate any perceived loss.
A willingness from the employee to plan in advance, and clear explanation from the employer means many of the objections can be overcome.
Arguably shift swap systems give employees greater control over their time off than a holidays on request system where rules typically dictate how many staff can be off at any one time and requests may be denied.
For some, rostered holidays may seem too rigid and both management and employees may prefer a flexible approach where some holidays are scheduled in advance and a percentage of the annual leave allowance is kept as holidays on request to give employees more flexibility.

Reduced administration time

These arrangements significantly reduce the burden of rota supervision, and the time expended in the search for overtime or alternative cover for holidays within the annual roster also reduces the cost of cover and ensures that the cost base remains predictable. Whilst there will still be elements of administration within a net environment, they will be significantly reduced to:
  • Calculating entitlement – as per the gross option.
  • Operating rules – for example, shift swaps.

Workforce management software

Using a shift planning, rostering and workforce management system enables organisations to efficiently implement and manage a rostered holiday system as part of a net hours’ system. It provides a central repository for all workforce management data, handles the assignment of labour rotas and monitors variations as they arise.
Employees can also use the software to swap holidays providing an element of flexibility and administration time is significantly reduced.

Arrange a session with one of our experts where you can discuss the challenges you face and talk in broad terms about potential solutions and next steps.

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