UK businesses could pay up to £250,000 of annual leave post-COVID-19

As employees return to work, UK businesses are likely to face a backlog of annual leave requests that could cost thousands of pounds. By collecting data and analysing the average monthly salary at a baseline at £2,214 and at least 50% of employee annual leave owed, Coworking Specialists Instant Offices have calculated how much it would cost for companies of different sizes to pay staff for a minimum of two weeks of annual leave.

A business would face operational failure by honouring too many leave requests, especially in cases where employees still have up to 80% of their annual leave remaining for the year. At the same time, it’s not viable to pay staff out for those days instead.

Research shows 99% of businesses in the UK are SME’s, made up of between 1-250 employees. Those with full time workers are required to provide up to 20 days of paid holiday a year, excluding bank holidays.

Heading into the second half of 2020 and lockdown restrictions ease, the risk of too many employees requesting annual leave at the same time will pose a significant challenge for most businesses. For a small company, paying out ten employees for only half of their annual leave days could set the business back more than £10,000, while an SME of 250 employees faces up to £255,500 in costs.

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*These figures are based on the average UK salary and just 50% of leave owing.

Lucinda Pullinger, Global Head of HR at The Instant Group, said: “In addition to the financial challenges, there is a huge wellbeing element here too. Just because we are unable to take the destination holidays we hope for, it doesn’t mean we don’t need a change of pace. The need for a break from work has never been higher.

"The pressures of COVID-19 on some people are extreme, and protecting mental health is key right now. Taking a break, even if that break is at home under lockdown, is still beneficial, and employers should encourage employees to take their holiday to protect their wellbeing, not just for financial reasons."

As the working population in the UK return to work, this logistical nightmare has been raised by businesses as one of their key concerns, with the government looking at several ways to assist the 5.9 million businesses who will be affected.

This means many businesses still face pay-out and carry over challenges, especially if employees leave the company before they have had a chance to take their allocated time off.

For more information on Instant Offices’ research in ‘How Much Could Annual Leave Bottlenecks Cost UK Businesses Post-COVID?’ please click here.

Startup Details

Startup Details

TOTAL FUNDING AMOUNT
CB RANK (COMPANY) 127,426

The Instant Group

Founded in 1999, The Instant Group is a workspace innovation company that rethinks workspace on behalf of its clients injecting flexibility, reducing cost and driving enterprise performance. Instant places more than 7,000 companies a year in flexible workspace such as serviced, managed or co-working offices including Sky, Network Rail, Capita, Serco, Teleperformance, and Worldpay, making it the market leader in flexible workspace.

Instant Offices hosts more than 12,000 flexible workspace centres across the world and is the only site of its kind to represent the global market, providing a service to FTSE 100, Fortune 500, and SME clients. 

With offices in London, Newcastle, Berlin, Haifa, Dallas, New York, Miami, San Francisco, Hong Kong, Sydney, Singapore, and Kuala Lumpur, The Instant Group employs 230 experts and has clients in more than 150 countries. It has recently been included in the 2018 Sunday Times’ HSBC International Track 200.

  • Headquarters Regions
    London, UK
  • Founded Date
    1999
  • Founders
    N/A
  • Operating Status
    Active
  • Number of Employees
    230