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Practice Tips - staff prefer time off to a pay rise

15th Jul 2005
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The Labour Party tried to grab some headlines recently by suggesting they will be allowing people more holiday if they are reelected. Well, maybe that’s true for a small minority of people but I suspect most practitioners already give most of their staff at least four weeks paid holiday a year plus bank holidays, and that’s all they’ve really said they’ll guarantee.

What’s my point? It’s a simple one. Over many years in many different business I’ve never found it worth being too tight on the holiday allowance I have given people. The reasons are simple:
1.    if you don’t give people holiday absenteeism rises;
2.    if you don’t make people take holiday you can never understand what they really do and why you’re paying them in the first place (and I bet in every organisation of more than a few people there’s someone who goes away and no one really notices);
3.    staff value time off more than they do more pay in most cases.

Of course this last point might not be true if you’re really mean with your pay. But once people have reached some degree of comfort (and that doesn’t mean high pay) then I’ve found that if I offer more holiday as an alternative to a pay rise it’s often taken. And so long as things don’t get out of hand (if a person is really valuable taking more than six weeks holiday a year is going to be hard) this offer has almost no cost, because:
1.    they won’t take “sickies”;
2.    they will be more motivated because it’s never long to the next break, and
3.    they think you care about them.

All of which means productivity has never perceptibly fallen as a result.

So if you want to contain costs, think about giving more holiday to your staff.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs. A collection of previous articles by Richard on practice management themes is available in Practice Management Zone


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