Three quarters of Australian workers avoid taking leave due to rising costs and workloads

Key Findings:

• Almost 25% of employees have accrued more than the yearly entitlement, meaning businesses may be risking millions of dollars in leave liability
• 64% of employees are working from home to save money, but 34% say a free lunch could entice them back to the office
• Transport costs (43%) and saving money on food spending (30%) are the biggest financial drivers for working from home
• Almost half (41%) have avoided taking leave to save money or because of the cost of living, while 26% say they have too much work to take leave
• Levels of burnout among Aussie employees remains high at 42%, with 30% saying they’re overwhelmed by the amount of work they have to do
• 18% of employees actively searched for a new role at another company in Q3 – the highest level for 2022

Sydney, Australia 17 October 2022:

Three quarters of Australian workers feel they’re prevented from taking annual leave due to the cost-of-living pressures and demanding workloads, according to the latest industry research from ELMO Software.

The ELMO Employee Sentiment Index for Q3 2022 found three quarters (75%) of Australian workers who accrue annual leave have a reason preventing them from taking a break. Saving money due to the rising cost of living is the most common reason (41%), while more than one quarter (26%) say it’s because they have too much work to do and 15% have concerns about travelling because of COVID-19.

In a cautionary note to employers, almost a quarter (23%) of Australian workers have accrued more than the yearly annual leave entitlement of 20 days, with 13% holding more than two months’ worth of leave. According to the data, the average employee now has 23.8 days of leave accrued.

Employees are accumulating sick leave (also known as sick & carer’s leave) too. A third of workers (32%) have more than the yearly entitlement for personal leave, with the average number of days saved over double the yearly amount (21.7 days).

The study also revealed that older employees tend to hold more annual and personal leave days. On average, Baby Boomers and Gen X’ers have double or triple the amount of annual or personal leave compared with Gen Zs and Millennials.

Danny Lessem, Co-Founder and CEO of ELMO Software says these findings should be a strong reminder for business leaders to prioritise leave management within their organisation.

“Allowing annual leave accrual to blow out not only impacts an organisation’s bottom line, but it is a significant liability on the books, potentially costing Australian businesses millions of dollars. What’s more, taking leave is crucial for employees’ wellbeing. The damaging impact of burnout, with its flow on effects to productivity and performance, would be unnerving to quantify.

“The ELMO ESI Q3 emphasises the need for business leaders to understand why employees are not taking their leave. Is it due to unrealistic workloads, lack of resourcing, job insecurity, or because of the rising cost of living and economic uncertainty in Australia? Whatever the reason, it needs to be rapidly addressed by business leaders,” said Lessem.

“And as the end of year and holiday season approaches, this issue is particularly relevant for both employers and employees. Mandating employees to take a significant portion of their annual leave, encouraging them to enjoy a well-earned break and look after their mental health and wellbeing is paramount”.

Lessem says business leaders who focus on effectively managing employee leave entitlements over the next few months will come out ahead as we move into the New Year.

“For many organisations, this means utilising intuitive and innovative HR technology solutions as part of their people management strategy. Tech helps both leaders and HR to centralise, automate and simplify leave management processes. This gives senior management the ability to plan and forecast leave entitlements and provides peace of mind.”

Cost of living and working from home vs office/site

As well as influencing employees’ decision to take leave, the cost-of-living is impacting where they choose to work. The majority of employees in Australia (64%) are choosing to work from home to save money.

Of those, 43% of employees are choosing to work from home to save on transport costs while one in three (30%) say it’s because they spend more on food when they work at the office/on site.

The research also revealed younger generations (Gen Z 73%, Millennials 73%) and those working in the financial services and insurance (90%) are more likely to work from home to save money compared with other age groups and industry sectors.

And according to the data, one-third (34%) of people working from home say a free breakfast or catered lunch would entice them back to the office. A quarter of employees working from home would also be encouraged to work from the office if it has better technology than they have at home (26%), for social events (25%) or wellness initiatives (25%). Interestingly, Baby Boomers were the least inclined to be tempted by free food and 16% of respondents said nothing could encourage them back into the office/on site more often.

Employee priorities

In other findings, stability of an organisation has overtaken flexible and remote working in the list of employee priorities. Remuneration and bonus payments/incentives remain as the top priority for employees, which is indicative of the growing fear around a global recession or looming job losses.

Adding to this picture is the number of Australian workers encouraged by the economy to search for a new job (43% vs 36% in Q2 2022) and to seek a pay increase (49% vs 45% in Q2 2022), which has reached a peak this quarter, driven predominantly by the younger generations who are also more likely to anticipate a performance bonus.

Hours worked and worker wellbeing

On average, Australian workers put in 33.4 hours a week during Q3 – now the highest it has been all year.

Q3 saw Australian workers who continue arriving at work feeling unwell at relatively high numbers (26% in Q3 2022 vs 27% in Q2 2022) – still eight percentage points above the same time last year (18%). These numbers are higher for younger generations.

Burnout levels remain relatively high at 42%, and a third (30%) of employees continue to feel overwhelmed with the amount of work they have to do. The number of people who have taken a legitimate sick day in Q3 2022 remains 10 percentage points higher than in Q3 2021, reinforcing that COVID-19, flu and colds have been rampant over the winter without a lockdown in place. And again, these numbers are higher for Millennials (41%).

“It’s been a challenging year for everyone, and as we move into planning for 2023, people management processes and solutions should be reviewed with a lens that considers workloads, resourcing and project deliverables, yet prioritises simplification, efficiency and employee wellbeing.”

-ENDS-

Media Enquiries 

Adam Gangemi | TEAM LEWIS | +61 499 178 161 | adam.gangemi@teamlewis.com 

About the ELMO Employee Sentiment Index 

The ELMO Employee Sentiment Index offers an insight into the actions, attitudes, concerns, and behaviours of Australian workers. The report provides a quarterly analysis of the prevailing sentiment within the workforce to track changes in perceived job security and the employment landscape.

Respondents were asked to reflect on the three-month period between July 2022 to September 2022. The research was commissioned by ELMO Software and conducted by Lonergan Research in accordance with the ISO20252 standard. Lonergan Research surveyed 1,000 Australian workers aged 18 years and over between 15 July 2022 and 26 September 2022. The Research was conducted via a 14-question online survey. Respondents were members of a permission-based panel, geographically dispersed throughout Australia including capital city and non-capital city areas. After surveying, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.

About ELMO Software 

Established in 2002, ELMO is a cloud-based HR, payroll, expense management and rostering / time & attendance software provider. The company offers customers across Australia, New Zealand and the UK a unified platform to help organisations streamline their people, process and pay. ELMO operates on a software-as-a-service (“SaaS”) business model based on recurrent subscription revenues. For more information, please visit www.elmosoftware.com.au.