Employers look to cut holidays
Jun 30 2011
A quarter of bosses consider cutting holiday entitlement
More than a quarter of private sector employers are considering cutting holiday entitlement for staff in order to reduce employee benefit costs, research finds.
According to a study of 403 small and medium-sized enterprises by insurance provider Metlife, 27 per cent of companies believe they are too generous with holidays and 25 per cent are considering cutting paid holidays.
More than a third of employees would be willing to work longer, the study shows, but only if they receive a pay rise. The survey reveals nearly six out of ten employees believe they are unlikely to receive an annual pay increase in the next 12 months and 28 per cent last had a pay rise more than two years ago.
Pay settlements in the private sector are currently running at an average of 3 per cent (which is below inflation) while public sector staff face a pay freeze.
Currently all full-time workers have the statutory right to 28 days holidays including Bank Holidays.
Employers say on average they would aim to cut around four days paid holiday in order to contain costs with 36 per cent of employers saying they are considering offering additional unpaid leave to staff.
MetLife managing director Dominic Grinstead says, ‘Employers are starting to question the overall value of their employee benefits package and paid holidays are clearly an expensive part of the package. The ongoing UK economic recovery will rely heavily on SMEs and they need to contain costs. Employees are willing to be flexible to support their employer but will want something in return.’
He adds, ‘Employers should recognise that commitment and take a wider look at employee benefits in order to gain the maximum value for their business and their workforce, as a strategic approach to employee benefits can add real value.’
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