Why a 1-Jan holiday year could be causing you pain – a complete analysis

It can cause a logistical nightmare for operators when you hit a peak operating season like December and find your staff have a bunch of holiday days stacked that need to be used by January 1st. But is there a reason why so many of us seem married to a 1st January holiday year?

Here at Rotaready, we want to make staff scheduling simple, for both you and your team members. We don’t want anyone stressing over untaken leave or when they’re going to squeeze it in. And we help operators to do this with easy-to-use rota scheduling software.

In this article, we’ll explore the 1st January holiday year, how it impacts business operations, and some changes you might want to think about making.

Managing staff holidays

Managing annual leave for staff in hospitality can be more challenging than in other industries, largely due to the high rate of staff turnover and flexible shift patterns. It’s a big job, and one that many senior managers would rather not have to tackle. 

Firstly, there’s the admin side of it; from tracking holiday balances, to calculating the accruals for casual staff, there’s a lot to keep on top of. When it comes to monitoring colleagues’ working patterns and average hours over the 52-week reference period, and planning for the financial implications of when holidays are taken, it can feel like a lot.

And then there’s the human aspect of managing annual leave. If you’re managing a large team, potentially across multiple sites, you’ll need to have clear policies about how much notice has to be given before requesting a holiday, who those requests should be submitted to, and how many colleagues can be off concurrently. Make sure you’ve got a process in place for approving and recording holiday requests quickly and easily.

Are there other factors making holiday planning difficult?

Many of the challenges we’ve mentioned already can be managed using a good staff rota solution, but having spoken to our customers we realised that other factors might be getting in the way of efficient management of staff annual leave, and we wanted to find out what they were. 

We found ourselves asking if something as simple as the date of their holiday year could be having an impact on their business operations. So, we did some digging.

The chart below shows the distribution of holidays taken across the calendar year. As you can see, December and August are the busiest months for holidays; which won’t come as a surprise, given that these months coincide with Christmas and school holidays. 

If you’re familiar with the operations within hospitality, leisure or retail businesses (which we exclusively partner with), the high number of holidays in January won’t come as a surprise either. December is an extremely busy time for these industries, and teams are encouraged to take holiday after the festive rush.

How your holiday calendar makes a difference

Across all Rotaready customers, we saw that 43% use a 1-Jan holiday year. Another 43% opt for 1-Apr, with the remaining 14% using a different holiday year altogether.

The chart below shows the distribution of holidays taken during the holiday year; with month one being the first month of the holiday year. For example:

• if your holiday year runs from 1-Jan, a holiday taken in January would count as being in month 1
• similarly, if your holiday year runs from 1-Apr, holiday taken in April would also count as being in month 1

You can immediately see a very different profile. A general upwards trend as the year progresses, peaking in month 12, regardless of when the holiday year begins.

Why is this the case?

Holiday accrual

The majority of hourly paid staff will accrue holiday in line with the hours they work; this is usually at the statutory rate of 12.07%. Although some customers use a higher rate as a reward – perhaps for performance, or length of service. As such, a colleague will start a holiday year with no holiday, and start to accumulate as they work.

Side note: the benefit of this approach is that, by default, a colleague can’t take more holiday than they’ve accrued. This means that in the event of someone leaving the business, you won’t be in a position of having to make a deduction on their final payslip to recover an overpayment (which can be problematic if there’s a particularly large overspend).

As a result of having to wait to accrue holiday before being able to use it (a week’s holiday will take about eight weeks to accrue), hourly-paid staff take their holidays later in the holiday year.

The ‘holiday bomb’

Whilst some businesses we work with offer a carry-over policy for untaken holiday at the end of the holiday year; most take a ‘use it or lose it’ approach. This results in a rush towards the end of the year, where colleagues look to take their well-earned holiday before the opportunity is missed. This is sometimes referred to as the ‘holiday bomb’, and can have significant financial implications if it’s not been planned for.

What can we learn from this?

These two factors jointly mean holidays are most frequently taken towards the end of the holiday year, regardless of when the holiday year starts. 

Now, it’s true that these two factors aren’t unique to the hospitality, leisure and retail industries. The main difference compared with other industries, however, is just how busy and important the festive season is to the likes of restaurants, pubs, bars, cafés, hotels, attractions and shops.

So, if you’re a hospitality, leisure or retail business reading this, you may find that moving away from a Jan – Dec holiday year could ease some logistical and financial burdens through the busy Christmas period. And alternatively, if your business peaks at another time of the year, you may want to look at changing your holiday year to cater to this.

Customer viewpoint: Signature Group

Signature Group is a leading Scottish hospitality group made up of over 20 bars, restaurants, hotels, night clubs and a brewery, who we’ve been hugely proud to partner since 2017.

We caught up with HR Manager, Nicola Wallace, to get her insight on the impact of Signature Group’s holiday year running from Nov – Oct.

“Staff mental wellbeing is a core priority point for Signature Group. Time off is of course a big factor here, as holidays offer a chance to relax and unwind. Over the years we’ve found how our teams (and in particular younger colleagues) typically don’t plan their holidays too far ahead. To minimise the risk of someone feeling burned out, we use Rotaready to identify those who aren’t taking as much time off as they should, and subsequently encourage them to plan a break.

As with all businesses, we see an increase in time off requests towards the end of the holiday year. There’s never a quiet month for us, but by running our holiday year from 1 November, it means the holiday requests are for dates in October, which is typically a more manageable month than other times of the year. 

Furthermore, like with all hospitality operators, December is an incredibly busy and important period for us. To ensure we have enough hands on deck to uphold our service standards, we have a policy to minimise holidays throughout December, instead encouraging them for January. Running our holiday year from 1 November means that accrued holiday balances are lower in December which therefore makes our policy logistically easier to uphold.”

Ready to optimise your staff holiday management?

In this article, we’ve looked at the most challenging aspects of managing annual leave in industries where demand is somewhat seasonal, and staff turnover can be unpredictable. We’ve shared our own findings on how your holiday calendar might be affecting your operations, and how you can fix it. 

If staff holidays are giving you a headache and you’d like to find out how Rotaready could make your life easier, request a demo today.