High unused leave adds pressure on Aussie workers, firms

Recent data released by ELMO highlights increasing unused leave balances among Australian workers, which may be exerting added pressure on both employees and their employers.

According to the ELMO Employee Sentiment Index report, covering the period from July to September 2024, a survey of over 1,000 Australian workers revealed multiple insights into workforce challenges, including issues relating to leave, productivity, and job security.

The findings indicate a significant tendency among Australian employees to accrue annual leave, with 22% having accumulated more than four weeks' worth. Age appears to be a factor, as Baby Boomers and Generation X reported higher leave balances, averaging 19.9 and 20.3 days respectively, compared with Millennials at 14.9 days and Generation Z at 8.8 days.

Have 61% of respondents acknowledged barriers to taking leave? A notable 21% reported being too occupied at work, while 18% cited financial constraints as their reason for not taking holidays.

The economic landscape is another contributor to these trends, as a considerable portion of the surveyed employees, 29%, expect redundancies in the near term, and 38% feel compelled to work harder to maintain job security.

Joseph Lyons, Chief Executive Officer at ELMO Software, expressed concern about the implications of these findings. He noted, "Leave is not the first thing that comes to mind when you consider productivity in the workplace, however, taking annual leave can be a powerful driver of individual performance. By taking planned time away from the demands of work, employees return feeling rested, energised and more engaged, which helps to improve focus and productivity."

Lyons highlighted the financial implications for businesses, stating, "Excess annual leave accrual is also a serious financial burden for businesses, with untaken leave recorded as a liability on the balance sheet, not to mention the staggering costs of leave loading. We're seeing this across our customer base, with a total balance of annual leave hours sitting at over 13 million."

The report also underscored worker burnout, with 43% of employees reporting feelings of burnout and 43% acknowledging increased workload over the quarter, underscoring the necessity of taking a break.

Notably, Generation Z employees appear to be experiencing significant pressure, with 52% indicating a sense of burnout as the year draws to a close.

In response to the findings, Lyons remarked, "The holiday season is the perfect time of year to encourage staff to take an extended break, maximising their leave with the additional public holidays. The end of year is generally a quieter period in the business community across ANZ, giving our people an uninterrupted and well-earned break. With workers feeling burnt out dealing with increased workloads, taking a break to spend time with family and friends has never been more important. They can start the year feeling fresh and ready to hit the ground running."