More than a quarter of private sector employers are considering cutting holiday entitlement for staff in order to reduce employee benefit costs, new research from MetLife has suggested.
The nationwide study of SMEs found that 27% of companies believe they are too generous with holidays and that 25% are considering cutting paid holidays.
Currently all full-time workers have the statutory right to 28 days’ holidays including bank holidays.
Employers surveyed said that on average they would aim to cut around four days’ paid holiday in order to contain costs, with 36% of employers saying they are considering offering additional unpaid leave to staff.
Dominic Grinstead, managing director at MetLife UK, said: ‘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.
‘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.’
The study also found that 10% of employees have been offered an enhancement to their employee benefit package in lieu of a pay rise.
Of those, 48% have been offered more paid holiday in return for not receiving an increase in pay while 42% have been offered more flexible hours and 25% have been offered increased employer pension contributions.