Parental leave can be a controversial benefit category for employers. While generous policies can yield enormous returns in employee satisfaction, loyalty, and retention, they are often seen as too expensive because of the possible productivity loss while the employee is on leave. But in fact, employers in states that already have paid family medical leave have reported either positive or no noticeable effect on profitability.
As a benefits leader, you have a unique opportunity to reassure your people that succeeding at work and thriving as a family are not in conflict. In doing so, you can help employees feel confident in their new identity as a working parent.
State of the Nation
America lags far behind other countries—in fact it’s the only industrialized nation that provides no paid family leave—in supporting families with parental leave policies. The Family Medical Leave Act (FMLA) is currently the only federal provision in place. It provides up to 12 weeks of unpaid, job-protected leave within a single year to companies with more than 50 employees. But, in order to be eligible, those employees have to have been working with the company for 12 months or more. Three states (California, New Jersey, and Rhode Island) require employers to provide some amount of paid leave, and San Francisco is the only city that actually mandates fully paid parental leave. This leaves only 12 percent of Americans with access to paid parental leave.
Many families cannot afford to take unpaid leave while also managing the increased medical, child care, and other costs that come with a new baby. As a result, 33 percent of working mothers don’t take any time off at all. Perhaps most disturbing to employers, 43 percent of women leave the workforce altogether when they have their first child. This can result in employers spending more money hiring and retraining new employees to replace those employees who do not return.
When Google increased paid leave to 18 weeks, the rate at which new mothers left the company fell by 50 percent
What leading companies provide
Innovative companies recognize that parental leave policies can be an important differentiator in attracting and retaining top people. Netflix made news by offering new parents “as much time off as they want” during the first year after they bring a child home. Google, Facebook, Twitter, Etsy, Adobe, and others in the tech sector offer generous paid leave for parents as well. And their investment in supporting new parents is paying off. In fact, when Google increased paid leave to 18 weeks, the rate at which new mothers left the company fell by 50 percent. Because of this, other industries are following suit: Goldman Sachs, Johnson & Johnson, and Bank of America recently announced their new generous parental leave policies.
What to consider as you create or revise your policy
- Talk to your employees about their specific needs and if there are ways you can help support them.
- Make sure your benefits team has a current and solid understanding of the benefits your company must provide in each of your office locations.
- Compare your policies with others in your industry. Are you offering competitive parental leave benefits?
- Explore parental leave policies that give fathers, adoptive parents, and foster parents the same coverage that is traditionally given to birth mothers. This can help balance expectations and eliminate the ways working mothers can be penalized in the workplace.
- Create clear parental leave policy communications. People who are trying to conceive or adopt need to know what’s available to them both before and after their children arrive.
- Establish transition planning as people take parental leave and return to the workplace. Evaluate remote work options and emergency child care, if those are possible for your company.