Workers in England and Wales will have nine bank holidays this year, in Scotland they will have 12, and there will be 11 in Northern Ireland; these include the additional Queen’s Jubilee bank holiday.
Bank holidays and the economy
Campaigners and business leaders had previously hoped that this could become a permanent “thank holiday”, but the government has since claimed that the cost on the economy would be too great, at £2 billion.
Research commissioned from accountancy firm PwC showed that the government overestimated these figures by 64%, and also failed to take into account the non-financial benefits it could bring in return, such as improved mental health and wellbeing for workers.
During time off work, especially on bank holidays when schools and banks are closed, people are expected to spend more and put their money back into the UK economy.
According to Patricia Yates, Acting Chief Executive of VisitBritain, the impact of Covid-19 could cost the tourism industry £37 billion.
On a bank holiday many people go on staycations, visit attractions, and enjoy their long weekends with their families. As a result, the hospitality, leisure and retail sectors receive a much-needed boost with more people spending money. After the past two years of challenges, adding an additional bank holiday into the calendar could give some of the most vulnerable sectors a much-needed cash injection to aid recovery.
What are the rules surrounding bank holidays?
Legally speaking, businesses are not required to allow their workforce time off for bank holidays, or to pay them anything more if they do work during bank holidays. However, many businesses do, as part of their benefits packages and this helps them to stay competitive in a candidate-short market.
The only legal obligations companies have are through contractual agreements made with their employees.
Another legal factor to consider is religious discrimination. While workers can’t refuse to work on religious grounds, they can ask to use their annual leave to take a religious holiday such as Christmas or Eid and employers should do their best to accommodate this. Refusing to allow them to use their annual leave, or take the bank holiday, could leave you vulnerable to legal hot water on the grounds of religious discrimination. However, there are exceptions to this rule, if there are extenuating circumstances or irrefutable reasons for denying the employee time off on those days.
Any part-time workers in your business should always be afforded the same rights as full-time employees, with the minimum 5.6 weeks’ leave pro-rated in accordance with the number of hours they work.
The benefits bank holidays can bring to your business
Since the pandemic started, 500,000 workers left the labour market, and European workers left the UK in droves following Brexit, this has led to a chronic candidate shortage.
According to recent figures from the Office for National Statistics, the unemployment rate is currently at 3.7%, the lowest it’s been since 1974. As a result, there are currently more job vacancies than there are jobseekers in the UK. This has brought on a battle for talent in a restricted talent pool.
While it may cost you money to close your business and still pay employees when they aren’t working, the appreciation your workforce feels towards your business will benefit talent attraction, employee retention, the wellbeing of your workforce, and ultimately your business success and bottom line.
Talent attraction: Offering more than the statutory 28 days’ holiday, including bank holidays, will allow you to stand out in a competitor labour market. Review your benefits package to ensure your holiday allowance is competitive, offer additional mental health days, extra days holiday for birthdays or even add additional days to a holiday leave allowance for every year of service.
Wellbeing: Over the last two years, especially during the pandemic, employers have placed more emphasis on wellbeing, and those who have got it right have it at the top of their agenda. Employees who feel their employer cares about them will stay at that company far longer than a company that pays a higher salary but isn’t supportive of their mental health or work-life balance, which has become a top priority for many.
Productivity: Given the mental health benefits of paid time off, productivity will inevitably increase. With initiatives like the four-day working week, additional annual leave and other competitive benefits being offered, there have been proven productivity increases when people are paid the same amount to work less. Rather than paying the same amount for less work, you should think of it as paying your employees for less time but for a better quality of work.
What happens if your employees need to work bank holidays?
Businesses are not required by law to close on bank holidays.
In sectors that are unable to close or allow workers to have time off during a bank holiday, such as the NHS, retail, or hospitality and leisure, you should consider compensating your workers. This could be by offering more money if they work a bank holiday or giving them an extra day off on a less busy day.
If your workers can’t afford to take the day off, they might appreciate still being able to work, especially if they will be rewarded for doing so.
As mentioned, bank holidays provide an opportunity for the hospitality and leisure to make a larger profit than usual. In return for working on a bank holiday, businesses in the sector could offer employees a benefit through their own services. For example, restaurants could offer a free meal for the employee and a friend, a beauty salon may wish to offer a free treatment.
Unlimited holiday entitlement: the next big incentive?
In the last couple of years, the idea of offering the workforce unlimited annual leave has gained traction, with many companies offering this, including LinkedIn, Bumble and Netflix. However, it is still highly debated among employers.
Some have argued that this idea is open to employee abuse, while others believe it is more likely to have the opposite effect, in that employees won’t take as much annual leave as they do now. With no maximum annual leave there is also no minimum, meaning employers could also exploit workers by denying them any more holiday than is required by law. Allowing employees to take more time off, assuming it doesn’t cause too much disruption to the business, can build trust both ways and reduce staff turnover.
One variation of this benefit has been implemented by investment bank Goldman Sachs, which recently announced that its senior staff would be entitled to unlimited holiday, intending to promote “rest and recharge”; however, their junior staff would still have a set number of annual leave days.
If you’re looking for more advice on the benefits, you should be offering to attract talented professionals to your team. Contact one of our recruitment specialists for advice.
