The real cost of employees not taking leave
CIPD research consistently shows that presenteeism — being physically present at work but not functioning properly — costs UK organisations far more than absenteeism. Employees who don’t rest properly make more errors, take longer to complete tasks and struggle with decisions that would be straightforward if they were properly rested. The cumulative impact on a small team is significant.
There’s also the burnout risk. Employees who run high for too long without adequate rest become more likely to go off sick for extended periods, which is far more disruptive and costly than a planned two-week holiday. The short-term productivity of having someone at their desk in August often costs more in the long run than encouraging them to take the break they need.
Leavism is worth understanding too. Research from the CIPD has identified a growing pattern of employees using annual leave to catch up on work rather than genuinely rest. If your team is doing this regularly, it’s a signal that workload management or resourcing needs attention, not a sign that the business is running efficiently.
How annual leave shapes your culture
How managers behave around leave sets the tone for everyone else. A manager who never takes holiday, sends emails at 11pm and responds to messages on their own annual leave is communicating something clear to their team: taking proper time off is not what’s expected here. That message travels fast and it sticks.
The reverse is also true. When senior people visibly and unapologetically take their leave, encourage their team to plan ahead and return talking about what they did, it gives everyone permission to do the same. This is one of the lowest-cost, highest-impact culture shifts a business can make.
Practical steps to encourage better leave uptake
Start with visibility. If employees don’t know how much leave they have left, they’re not going to plan it well. A clear, accessible system for booking and tracking leave removes friction and makes it easier for managers to see who needs a nudge. If you’re using HR software like Breathe HR, this kind of visibility is straightforward to set up.
Build leave planning into your regular conversations. During one-to-ones and appraisals, ask about leave. Not as a box-ticking exercise, but as a genuine check-in. If someone is consistently carrying over large amounts of leave, explore why. Sometimes it’s workload. Sometimes it’s culture. Sometimes it’s personal circumstances. The answer shapes what you need to do differently.
Think about how you handle busy periods too. Proactively agreeing blackout dates and communicating them early lets employees plan their leave around operational needs rather than finding out at short notice that their request has been declined. Fairness and transparency in how leave is managed reduce resentment and make it easier to hold the line when you need to.
What you should do now
- Check your current leave balances. If a significant proportion of your team are carrying large amounts of unused leave, act now rather than waiting for an end-of-year rush.
- Review your holiday pay calculations, particularly for employees with variable hours or regular overtime.
- Make sure managers are setting the right example. If they’re not taking their own leave, address it.
- Look at your leave booking process. If it’s complicated or creates friction, fewer people will use it.
- Consider a leave policy if you don’t have one. A clear, written policy removes ambiguity and gives managers a consistent framework to apply.
How Limelite can help
If annual leave management is creating problems in your organisation, whether that’s end-of-year scrambles, disputed carry-overs, incorrect holiday pay or a culture where nobody feels they can switch off, we can help. Our HR consultancy team works with organisations across Worcestershire, Birmingham and the wider UK to get the people stuff working properly.
We can review your leave policy, support with holiday pay calculations, and help you build a healthier approach to time off across the business. Find out more about our retained HR and HR consultancy services, or book a free 30-minute discovery call to talk it through.
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About the author
Helen Scullion Assoc. CIPD, HR Client Manager at Limelite HR & Learning. Helen supports organisations with day-to-day HR management, employee relations and practical people support. Connect with Helen on LinkedIn.
