Relax! Holidays Are Good For Business

19th May 2016

payroll execs on holiday

Processing holiday pay and calculating deductions for time off is a common activity for payroll departments. Month in and month out there are always people taking time off across the business. But it isn’t just keeping payroll busy, making sure employees are taking time off work is vital for a business as a whole.

Time Off Improves Performance

Ernst & Young discovered that if employees took an additional 10 hours off, their performance rating improved by 8%. On the other hand, vacation deprivation can cause fatigue, resentment and an increase in errors on the job.

The reason for this is because rest is important. Nothing groundbreaking, to be sure, but when things are busy and stressful at work, it’s easy to lose sight of. Just like sleep, we need time to decompress from the stresses of work. Taking some time away from work is refreshing and makes us keen to jump back into the fray at our full potential.

Another reason for an increase in performance is present bias. Human motivation is highly influenced by how imminent the reward is perceived to be. Therefore, the prospect of an upcoming holiday will motivate employees to work better just before they take time off.

A Change Of Perspective

Getting away from the daily grind allows people time to think more creativity – like taking a shower, but on a larger scale. Without the day-to-day occupations of work, employees can use the time and new perspective in see creative new ways to tackle business challenges. This can be amplified by encouraging a company culture of flexible working, making it easier and more acceptable for employees to work out of the office and take days off altogether.

A Happier, Healthier Team

Time off work is essential to preventing burnout among your employees. Burnout, or a state of chronic stress and frustration leads to physical exhaustion, stress, and an overall feeling of negativity. The effects of burnout can be a terrible blow to your company’s morale and productivity. With a healthier teams comes fewer sick days and higher performance.

Managing your employees’ time off allocation and holiday pay is a key part of employee engagement and business productivity. As one of payroll’s primary functions, it is important for businesses to have access to effective payroll tools.

If your payroll team is struggling to stay on top of the administrative burden, preventing your people from getting those much needed breaks, you should consider a new approach. Perhaps going to a part managed bureau basis, fully outsourced payroll, or bringing in payroll software could help prevent burnout.