Chancellor George Osborne has called Britain’s weak productivity a great economic challenge, saying we don’t train enough, build enough or invest enough. Hourly output was 17 percentage points below the G7 average in 2013 (latest figures from the Office for National Statistics) – the widest productivity gap since 1992.

UK output per worker was 19 percentage points below the G7 average and the UK has the second lowest productivity rate of world’s richest nations (only Japan is worse).

But why is productivity in the UK so low?

Sickness absence is a factor. Other ONS research estimated that some 131m days were lost in the UK because of sickness absence in 2013. Although high, this was still significantly less than the 178m days UK workers were off work ill in 1993.

Research by multinational professional services firm PwC estimated that sickness absence cost UK employers £29bn in 2013. And UK workers have an average of 9.1 sick days a year – almost double the US average and four times more than Asia-Pacific. The average in Western Europe is 7.3 days. Yet 31 per cent of employers report an increase in staff coming to work while they are ill, according the CIPD Absence Management Survey 2015.

Holiday entitlement

But it’s not as if all UK employees are taking their full holiday entitlement. In fact, a recent a YouGov survey (‘based on responses from 2,364 employed adults’) commissioned by business information services company Wolters Kluwer suggests that 31 per cent of UK employees did not take their full holiday entitlement in 2014. Just 7 per cent of those who didn’t take their full holiday leave were not able to roll their lost days over into their 2015 entitlement.

A third (33 per cent) of respondents said they did not take all of their annual leave allowance in 2014 because their workload was too heavy, while 13 per cent felt they couldn’t take the day(s) off and 4 per cent were worried what their employer would think if they took the day(s) off.

Employees’ right to paid holiday is determined by the EU Working Time Directive, which seeks to protect people’s health and safety, because working excessively long hours is a major cause of stress, depression and illness. In the UK, full-time employees are entitled to at least 28 days off (including bank holidays).

According to the Telegraph, ‘The [UK’s] 28 day minimum is among the lowest in Europe, where the average is 33 days, and only one country – Mexico – has fewer public holidays than the UK.’ In the USA, there is no statutory holiday leave, although government workers get time off for 10 public holidays.

Cause for concern   

The fact that such a large percentage of UK workers feel that they can’t take their full holiday entitlement is a real cause for concern, says Mike Allen, managing director at Wolters Kluwer’s UK HR solutions division, Croner. As he warns, ‘The problem with not taking time off is that it leads to absence through sickness, which is why the Working Time Directive was introduced in the first place.’

The survey supports the view that short-term absence is a continuing problem for UK businesses, with 5 per cent of respondents admitting to ‘pulling a “sickie”’ in the past 12 months. That figure rose significantly to 16 per cent for workers aged 18-24 who responded to the survey.

‘Managing short-term absence such as holidays and sickness is a real challenge for UK business,’ Allen adds. ‘Organisations need to focus on interventions and management of short-term absence and holidays to ensure that employees have a healthy work-life balance. Bosses should ensure that employees feel able to take annual leave without the fear of what they may return to.’

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