What Your CEO is Reading: Paid Family Leave

Currently 19 of the 20 largest employers invest in some form of paid parental leave. While differences exist in duration of leave and percent of wage replacement, a growing number of companies have announced efforts to provide equal access to parental benefits.

January 09, 2020

It’s no secret that large employers have been leading the way in supporting working parents. New York Time’s article “Walmart and Now Starbucks: Why More Large Companies Are Offering Paid Family Leave” highlights this trend – inclusive of salaried and hourly employees, moms and dads, and birth, adoptive and foster parents.

Currently  19 of the 20 largest employers invest in some form of paid parental leave. While differences exist in duration of leave and percent of wage replacement, a growing number of companies have announced efforts to provide equal access to parental benefits.

Forward-thinking companies are integrating family-friendly policies into their workforce strategy to attract, retain and engage the workforce. Developing inclusive, gender-neutral policies available to both salaried and hourly employees can reflect organizational values and demonstrate commitment to equity and diversity.

Why Your CEO May Care

No company today can afford to ignore the business impact of paid parental leave and its role in the competitive benefits landscape:

  • Major Impact on Return-to-Work. Women who worked at least 20 hours/week prior to a child’s birth and took paid leave were 93% more likely to return to work one year after the birth of a child than those who did not take leave.1
  • Tangible Cost Savings. It is more costly for an employer to search for a replacement, and invest time and money training that replacement, than it is to temporarily arrange for coverage of the employee’s duties while they are on leave.2 In addition, the new tax credit can be leveraged by employers providing 2-12 weeks of annual paid family and medical leave.
  • Talent Attraction & Retention. According to an Ernst & Young study, 86% of U.S. millennials say they’re less likely to quit a job if parental leave is offered to both women and men.3 In a Deloitte survey, 77% of employees said that paid family leave could influence their choice of employer.4
  • Improved Performance and Morale. More than 70% of companies with paid family leave reported a boost in productivity, and 99% of employers in another study reported that paid family leave produced an increase in employee morale.5,6

In addition and not to be overlooked, paid parental leave positively influences the health of the child, mother and family in ways that are likely to benefit company and community over time.

What Can Employers Do?

According to the 2017 Business Group on Health Employer Efforts to Support Working Parents Quick Survey findings, 65% of participating employers offer parental leave beyond traditional and PTO leave. Employers also reported other supports for working parents:

 

  • 87% offer dependent care flexible spending accounts
  • 67% offer flexible work arrangements
  • 58% offer legal services for new parents
  • 53% offer phased return-to-work
  • 41% offer emergency/backup day care assistance
  • 31% offer discounts to a local day care

Do You Think Caregiving Will Become Increasingly Important Issue over the Next 5 Years? 
Figure 1: Do You Think Caregiving Will Become Increasingly Important Issue over the Next 5 Years?

And it’s important to note that while support for working parents has received much attention recently, a new and broader approach is emerging to support both working parents and caregivers of elder and adult dependents.

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  • 1 | House L, Vartanian TP. Pay matters: The positive economic impacts of paid family leave for families, business and the public. Rutgers Center for Women and Work; 2012.
  • 2 | Trzcinski E, Finn-Stevenson M. A response to arguments against mandated parental leave: Findings from the Connecticut survey of parental leave policies. Journal of Marriage and Family. 1991;53(2):445-460.
  • 3 | Ernst & Young. Study: work-life challenges across generations: Millennials and parents hit hardest. 2015.
  • 4 | Deloitte. Parental leave survey: Less than half of people surveyed feel their organization helps men feel comfortable taking parental leave press release. June 15, 2016.
  • 5 | Ernst & Young. Viewpoints on paid family and medical leave: Findings from survey of US employers and employees. March 2017.
  • 6 | Appelbaum E, Milkman R. Leaves that pay: Employer and worker experiences with paid family leave in California. Center for Economic and Policy Research. 2011.