Why Paid Family Leave is So Important

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With the release of The New York Times’ damning but, to be fair, disputed portrayal of the work environment at Amazon, the cultures cultivated at tech companies have been in the spotlight this week. This particular piece paints a dismal picture of life at a thriving tech company, but what is perhaps most unfortunate is that the article is overshadowing some good things tech companies have been doing in the last couple weeks, particularly around creating work environments that are welcoming and accommodating to women and minorities. Most notable among these efforts are changes to family leave policies that give new parents more paid time off to spend with their children.

In fact, three tech companies released statements in the last two weeks about updates to their policies. First Netflix, expanded their family leave policy to allow new parents to be “away from the office for as many days as they choose in the first 12 months after a child’s birth or adoption.”1 Shortly after, Microsoft, a T4A.org member, updated their policy,“doubling the amount of paid time off new parents will receive, adding company-wide holidays and reworking its 401(k) matching program.”2 In particular, eligible Microsoft workers will receive 12 weeks of paid leave, with mothers receiving an additional eight weeks. This is a nice change from their previous policy in which mothers still received 20 weeks of leave, but were only paid for 12. Father’s previously received 12 weeks total, with only four paid.3 And last, but certainly not least, Adobe announced on August 10 that it was more than doubling its family leave, allowing new mothers to “receive 26 weeks of paid leave, up from 12 weeks, and primary caregivers and new parents […] 16 weeks of paid parental leave.”4

So why is this important? First, these policies have an impact on workforce diversity. In December of last year, a poll conducted by the New York Times, CBS News, and the Kaiser Foundation found that “61 percent of women said family responsibilities were a reason they weren’t working.”5 Improved leave policies allow greater flexibility and more time at home, enabling women who may have previously felt pressure to leave the workforce to care for children a way to balance their time between career and family. As WIRED points out, “[b]y offering improved parenting benefits, especially those that help support women (and men), they’re hoping to not only catch the attention of their current employees, but attract the best, most diverse talent, too.”6 And it’s not just about recruiting the best talent, but also about retaining the best talent. Suzanne Donohoe, a partner at KKR, a private equity firm that also just updated their leave policies, explained, “[w]e can spend years trying to attract people into our firm and growing them over time […] But if you’re not thoughtful and supportive during important transitions in their lives, some of that talent could leave the organization.”7 Recognizing that it’s not just during the newborn phase that parents want and need flexibility to care for their children, KKR also allows “new parents to bring their child and a nanny along on business trips until the baby turns one,”  in addition to 16 weeks of paid leave. 8 These type of policy updates are crucial for new parents, particularly new moms, who, in the absence of such changes, may have decided to drop out of the workforce altogether.

These changes are also important in the U.S.’s role as a global business leader. It’s fairly common knowledge that happier workers are more productive. It’s one of the reasons tech giants like Facebook and Twitter offer perks such as free meals, dry-cleaning, and on-site gyms. In fact, a study published last year at the University of Warwick in the United Kingdom revealed that “happy people were 12 per cent more productive than ‘normal’ people.”9 Worker happiness is also impacted by the more traditional benefits: healthcare, retirement plans, and yes, leave policies. Surprisingly, the United States “is the only developed country in the world that does not require some kind of paid leave for new mothers.”10 While the Family and Medical Leave Act, passed in 1993, requires companies to offer mothers 12 weeks of leave and job protection, it does not require that this leave be paid.11  And though many companies do offer paid leave, as evidenced above, this is not the norm. According to the Department of Labor’s Paid Family and Medical Leave factsheet, “[o]nly 12 percent of U.S. private sector workers have access to paid family leave through their employer.”12 By expanding these policies, giving workers more flexibility, and fostering an environment of support, these tech companies are not only increasing employee morale and happiness, they are also, increasing their own productivity. As Bruce Elliot, manager of compensation and benefits at the Society for Human Resource Management, bluntly, put it. “They’re not doing this to be nice […] They’re hoping to see a return on investment.”13 While I disagree that companies aren’t doing it to be nice, Elliot makes a good point. Improving these policies is an investment in workers that pays off for everyone – it’s a win-win situation.

Paid family leave is important. Regardless of industry, job, or socioeconomic status, every parent deserves to have the flexibility to pursue both a family and a career. It is particularly important for the tech industry though as they battle low diversity numbers and a reputation for being less than inviting towards women. It’s great to see big-name companies like Netflix, Microsoft, and Adobe taking steps to make their workplaces more flexible, accommodating, and welcoming to people of all backgrounds. Not only are these updated policies good for retaining talent and promoting worker morale, they’re also good for company productivity. Now it’s time to see if other companies and industries follow suit!

References
1 Green, J. and Shaw, L. (2015, Aug. 4). Netflix Offers New Parents Up to a Year of Parental Leave. Bloomberg Business. Retrieved from http://www.bloomberg.com/news/articles/2015-08-04/netflix-to-offer-unlimited-parental-leave-in-child-s-first-year
2 Demmit, J. (2015, Aug. 5). Microsoft reworks parental leave, 401(k) and holidays in latest escalation of benefits battle. GeekWire. Retrieved from http://www.geekwire.com/2015/microsoft-reworks-parental-leave-401k-and-holidays-in-latest-escalation-of-benefits-battle/
3 Demmit.
4 Reuters. (2015, Aug. 10). Adobe to Double Leave It Offers to New Mothers. The New York Times. Retrieved from http://www.nytimes.com/2015/08/11/business/adobe-to-double-leave-it-offers-to-new-mothers.html
5 Miller, C.C. and Alderman, L. (2014, Dec. 12). Why U.S. Women Are Leaving Jobs Behind. The New York Times Upshot Blog. Retrieved from http://www.nytimes.com/2014/12/14/upshot/us-employment-women-not-working.html
6 Greenberg, J. (2015, Aug. 13). Tech’s Selfish Reasons for Offering More Parental Leave. WIRED. Retrieved from http://www.wired.com/2015/08/techs-selfish-reasons-offering-parental-leave/
7 McGregor, J. (2015, Aug. 18). The newest benefit for working moms. Washington Post. Retrieved from
http://www.washingtonpost.com/news/on-leadership/wp/2015/08/18/the-newest-benefit-for-working-moms-paying-for-a-nanny-on-business-trips/
8 McGregor.
9 Wallop, H. (2015, Apr. 22). Are happy workers more productive? The Telegraph. Retrieved from http://www.telegraph.co.uk/news/shopping-and-consumer-news/11553473/Are-happy-workers-more-productive.html
10 Greenberg.
11 United States Department of Labor. (2015, Jun.). DOL Factsheet: Paid Family and Medical Leave. Retrieved from http://www.dol.gov/wb/PaidLeave/PaidLeave.htm
12 Greenberg.
13 Greenberg.

Featured image via Greenberg.

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