Can five weeks of annual leave entitlements enhance well-being and productivity?

Annual leave was first introduced to the Australian workforce in 1941 giving workers one week of leave. It then rose to two weeks in 1945, three weeks in 1963, and four weeks in 1974 where it has since stayed.

The concept of annual leave – or paid time off – is more than just a break from the routine of work, it’s a crucial component of achieving and maintaining a healthy work-life balance.

Here, we explain why the push to raise annual leave entitlements could be a game-changer for both employees and employers.

Let’s get into it…

1. Prioritising well-being, rest, and relaxation

With 60 per cent of Australians believing that four weeks of annual leave isn’t enough paid time off during the year, it’s easy to see how workers would embrace the idea of increased leave entitlements. Extended annual leave offers employees the opportunity to truly disconnect and recharge. It’s not just about physical rest but also mental rejuvenation. With more time away from work, employees can pursue hobbies, spend quality moments with loved ones, or simply indulge in self-care activities. Whether the extended break is used to simply switch off or go on a holiday, the extended time away from our day jobs can significantly reduce burnout, stress, and fatigue, boosting overall mental health and well-being.

2. Boosting productivity levels in a significant way

Contrary to widely held beliefs, more time off can actually lead to increased productivity. When employees return from a refreshing five-week break, they’re likely to bring renewed energy, creativity, and focus to their work. This can result in higher efficiency, better problem-solving skills, and a more positive attitude towards tasks. Additionally, reduced stress levels mean fewer sick days and higher engagement levels, ultimately benefiting the organisation’s bottom line.

Businesses like Bunnings, IKEA, Big W, and Apple are already on board, with the Shop Distributive and Allied Employees Association winning the leave entitlement in recent bargaining.

3. Improved employee retention and an invaluable competitive edge in recruitment

Offering extended annual leave can be a powerful retention – and recruitment – tool. In an increasingly competitive job market, companies that prioritise employee well-being and work-life balance are more likely to attract and retain top talent. Employees feel valued and appreciated when they have adequate time off to rest and recharge. Building and maintaining a culture that encourages work-life balance fosters loyalty and commitment among staff, reducing turnover rates and associated recruitment costs.

4. Building your business’s reputation

Companies that don’t just talk about employee well-being but actually prioritise it and offer generous annual leave packages tend to enjoy a positive employer brand image. This reputation not only attracts top talent but also enhances the organisation’s appeal to clients, partners, and investors. A company known for its commitment to work-life balance is perceived as progressive, ethical, and employee-centric, which can result in far-reaching benefits in terms of business growth and sustainability.

In today’s fast-paced and competitive work environment, the importance of annual leave can’t be overstated. Extending annual leave to five weeks represents a significant investment in employee well-being, productivity, and overall organisational success. By prioritising work-life balance and acknowledging the benefits of extended breaks, companies can create a more positive and sustainable work culture that fosters creativity, engagement, and long-term growth.

If this push from Australian Unions is successful, the country would join France, Finland, Sweden, and Norway as countries that require employers to provide a minimum of 25 days annual leave in addition to State and Federal public holidays.

If any of this information has raised questions for your business about managing annual leave entitlements or you have another workplace matter you need assistance with, please reach out to our friendly team of experts via our 24/7 HR Advice Line.

Not a Citation HR client? To learn more about how Citation HR can support your business and streamline its people management, reach out to our team here.

About our author

Jessica Husband is an Employment Relations and Health & Safety Consultant at Citation HR. She assists clients with a range of employment relations and compliance matters via the 24/7 HR Advice Line. She has been helping businesses and employers with employment relations for over four years and counting.