Annual Leave liability

Booking convenience the key to cutting annual leave liability



Large annual leave balances are a red flag on any company balance sheet. The longer staff go without taking holidays the greater the risk to cash flow in the long run.

Creating strategies and incentives to reduce annual leave balances is especially tough for businesses that operate on a lean corporate structure with limited internal resources.  After all, productivity takes a hit when you're down a team member.

Having the service and support of a Travel Management Company (TMC) can give you a leg up on annual leave liability.  TMCs aren't just about getting you from A to B for your next interstate meeting.  A well connected one can give you service that goes past business travel into other areas of your business, including annual leave liability.

Why do annual leave balances get so out of control?

Companies rack up large annual leave balances for several reasons including:

  • Businesses being unable to cope when key team members are away
  • Staff not wanting to return to a huge backlog of work after holidays
  • Staff intentionally hoarding leave for extended breaks, or as a contingency for serious illness.

All these factors add up to increased financial liability which affects the overall value of a company.

Going too long without leave also has a negative effect on staff wellbeing, morale and performance.

Staff who refuse to take a break are often less productive and less satisfied in their jobs which has a ripple effect on company culture.

What can you do about it?

Take stock of any tactics you're using to cut your liability.  Are you even using any? If not, it's time to put a few strategies in place.  First off, we've found employees generally like to go somewhere when they take leave so why not put holidays front and centre in some workplace communications.  There's a few ways to do this :

  • Promote leisure travel deals in the workplace through regular email and via your company intranet
  • Give employees incentives to take leave in allotted periods
  • Give travel vouchers, gift cards or discounts as rewards and incentives
  • Educate staff on the health and wellbeing benefits of taking breaks

Partnering with a TMC gives you an easy way to pull all these tactics together.  Work alongside your travel partner to shape a strategy for reducing leave balances throughout the year. This can include opting in staff for exclusive holiday deals and last minute offers via your TMC and delivering access to a travel booker who has access real time access to the best deals in the market. 

Getting help from an expert

If your company is currently partnered with a TMC, ask them what services they can offer you beyond business travel.  Give them an idea of your liability and see where they can contribute to taking the pressure off.  This can take a tailored approach where your employees can talk to the consultant about their travel preferences and what they want to be alerted about.

If your travel partner has access to a global network, it's likely they've also got the ability to send you deals directly.  Got a staff event coming up?  Why not grab a few travel vouchers to use as prizes for your top performing employees? Increasing the incentive to book with something as small as a couple of hundred dollars can be all an employee needs to shave off a few days or even a couple of weeks.

Creating some buzz in the office about limited time offers is also an easy win.  Your TMC should be able to alert you to last minute package deals or a hot airfare sale.  It's opportunities like this where you can put up leave incentives like adding an extra day here or there for free to encourage a longer stay.  When it comes to your bottom line, every little bit helps.

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