“Let no crisis go to waste.”
From supplies to food to doctor bills and everything in between, having a child can be a daunting financial challenge, but it packs a double punch when new parents have to take unpaid time instead of paid family leave after welcoming a new child. It seems like a cruel irony -- decreased income in a time of increased spending -- but it’s an unfortunate reality for millions of new moms and dads each year in the United States.
While paid parental leave may seem unimportant in the midst of a global pandemic, particularly for Americans who are choosing to put family planning on hold, those without paid parental leave who are still planning to have a child in the next few years should consider how to make it a priority for their employer.
It’s incredibly important to broach the subject sooner rather than later, because it can take many months, if not years, to change such a significant policy -- especially now, given the economic or financial headwinds facing companies across the country.
If the pandemic has a silver lining, however, it’s the realization by companies that they do have to support their employees’ needs and wellbeing. Because of this, parents and caregivers are in a better position -- perhaps now more than ever before -- to change company policy.
Many of the ancillary benefits, and even many of the core policies and programs, that companies offer during “normal” times are of little to no value in either the day-to-day business struggles of the pandemic or the day-to-day challenges of families. But by leveraging the renewed focus on the pandemic’s impact on families and parents -- and the subsequent impact on the most affected employees’ abilities to contribute and stay productive -- makes now the right time to lobby companies to re-craft HR policies to include paid parental leave.
The first step in the process is to have a clear definition of paid parental leave. It’s not a short-term disability insurance policy, or two or three weeks of saved-up PTO. It’s an extended period of time off paid at full salary, or close to it (we recommend at least 75% of pay), that lasts at least 8 weeks, and is separate from other existing paid leave policies.
How to ask for paid leave
There’s a long-term trend among states and employers to pick up the slack left by the lack of a federal paid parental leave program and private insurers.
This growing momentum is good news for advocates wanting to push their companies to offer paid parental leave. Regardless of how popular the idea is becoming, though, asking an organization to make the financial and other changes required for paid parental leave may still be met with resistance.
It’s a complicated topic with high stakes, which means it’s more important than ever to approach the subject with knowledge and confidence while focusing on it as an investment and not a cost. And if you're ready to bring up the subject of paid parental leave with your company’s executives or HR team, it’s essential to come prepared: know your facts, have answers to anticipated questions, responses to push back, and bring the hard data to back up your assertions.
What’s great is there are literally dozens of academic and case studies showing positive outcomes and significant ROI from offering extended paid time off to new moms and dads. You’ll see the most critical data and conclusions below.
First, legally, a business can’t provide paid parental leave to employees on an individual basis. It has to be offered more broadly and access to the policy cannot be based on factors related to age, gender, sexuality, race, or any other protected characteristic, requiring a full-on policy shift. Executives will need to reallocate funds, re-examine benefits packages, and understand the ROI of paying someone a full-time salary while they do no work for months on end.
Building your case to ask for paid parental leave: Here’s why paid parental leave matters
Today, the vast, vast majority of companies implicitly treat having a baby as a one-off medical issue, not the life-altering event it is. It’s a new human being, a permanent addition to the world, and it changes everything for their family, whether it’s the first child or the fifth.
The American College of Obstetrics and Gynecology refers to the first weeks after birth as a “critical period for a woman and her infant, setting the stage for long-term health and well-being.” Treating employees right from the beginning lays the groundwork for not just a productive return to work, but a reduced motherhood penalty. What that means is that over the long term female employees continue contributing at the same level as before they had a child.
Combine that with the large number of fathers who return to work even sooner -- if they take leave at all -- and that leaves little to no time for family bonding, for parents to adjust to new schedules, or to get some much-needed sleep. That significantly disrupts employee output and productivity, not to mention morale.
Another big issue that can strain a new family when paid parental leave isn’t an option is child care. Many child-care organizations will not take children less than 12 weeks old, so unless the parents have a tight network of family and friends to help out while they go back to work, the parents might be faced with some difficult decisions and serious hardships, both financially and emotionally. By not providing 12 weeks of paid parental leave, companies are inherently creating an undue burden on new parents with limited care options. That guarantees sub-optimal, if not downright bad, outcomes for the employee-employer relationship.
The good news is that while post-return challenges may still arise, the corporate mantra that paying employees to take leave hurts the organization is a myth.
Hit ‘em with the hard data
As convincing as these qualitative issues may be to an advocate, the thought of paying employees their full salary when out of the office for such an extended period of time may, nay, usually will, face resistance. You’ll need to ask for paid parental leave armed with hard facts on the ROI; here are some critical data points to get you started building the business case for your company:
Relevant and high utilization: Depending on the demographics of a company’s workforce, an average of 3 to 5% of their employees -- both male and female -- should have a child each year. (However, there will likely be significant variability year-to-year.) That makes paid parental leave incredibly relevant. No ancillary benefits policy (e.g. short-term disability, long-term disability, or life insurance) sees so many employees using it each year.
Increase long-term retention: Below-average birth rates at a company indicate employees are quitting before having their children. If a company doesn’t have a birth rate between 3 to 5%, their prospective parents are quitting to pursue better policies elsewhere.
Increase new mom retention: 1/3rd of new moms without generous paid parental leave quit their jobs. And, contrary to one common response, short-term disability is not an alternative and doesn’t meaningfully lessen the attrition rate. Using short-term disability insurance as a proxy for maternity leave, attrition will remain about 25-30%.
Long-term gains in new parents’ output: Without ongoing support from their companies (and families), new moms who return to work cut their hours and output by 20% or more. This means most companies lose high-quality, capable talent -- sometimes a rare find -- to one of life’s most common events -- year, after year.
Minimal impact to the business: A few years after California implemented six weeks of state-funded paid family leave, a study of businesses there found that just 9% of companies said it had an adverse effect. Conversely, 99% reported it improved morale.
Putting it all together
With this information in hand, here’s how you can make the most convincing and effective case to your HR manager.
First, know that there’s strength in numbers. Establishing a coalition of other like-minded employees can have a positive psychological effect, because here’s a secret: HR departments tend to implement many policies solely because employees asked for them, regardless of whether they’re actually beneficial. In this case, a group request can wield more power, both in need and popularity.
When you approach your HR or benefits manager about your company’s paid parental leave policy, put it into the context of extended paid time off for both new moms and dads. Be clear that you are not referring to the short-term disability insurance policy, if you have one, or simply a few weeks of paid time off in addition to vacation and sick days.
Explain why paid parental leave is important to you (and the coalition you’ve hopefully built), and why it matters. Use the emotional, logistical, and equity items above as your foundation, especially those that underscore both the ROI that comes with paid leave and the realization that it’s not a cost but an investment when implemented effectively. (What’s considered effective? At least 75% of pay for 10 or more weeks of time off.)
HR will likely need to work with finance to sell the policy internally before budgeting and implementing the policy, so after you present your case, make sure to follow up and continue to push them on it. Don’t let it slip through the cracks.
This can be a long road, but is ultimately not only worth the time and effort but much needed.
Don’t feel you need to go it alone, though. Build that coalition, and if needed, Parento offers resources to help. They’re the first insurance-based program for paid parental leave, making it easier and more affordable for companies to offer paid parental leave and support to new parents.