Market Overview

For High Tech Companies, the Long-term Advantages of Paid Parental Leave Outweigh Short-term Productivity Considerations: Lessons for Other Employers

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SAN FRANCISCO, CALIF., Aug. 16, 2016 (GLOBE NEWSWIRE) -- High-tech firms have attracted media attention for adopting generous paid parental leave policies. Through a series of recent in-depth interviews, Human Resources (H.R.) and benefits professionals at 15 major technology firms have described how the long-term advantages of attracting and retaining talent outweigh any short-term hardships when an employee takes time off from work after the birth or adoption of a new child. The bigger challenge may be smoothing the transition for employees returning to work after extended time off.

Most of the firms had recently adopted or enhanced their paid parental leave policies, surpassing the average family leave policies listed in Working Mother's "2015 Hundred Best Companies." The typical paid parental leave policy allowed 14 weeks off for new birth mothers and 6 weeks off for other new parents. Because a birth mother at these companies is compensated for part of their leave by short-term disability (STD) benefits, the total cost to the employer is about 17% of her annual salary. The employer's costs for other new parents are about 12% of their annual salary.

Attracting and retaining talent is the main reason companies adopted generous paid parental leave policies. Also important was creating family-friendly work environments and formalizing what is frequently an informal process of employees negotiating time off with their supervisors without informing H.R. Several interviewees mentioned that this practice could negatively impact expectant mothers who must go through formal channels to qualify for STD benefits. In the words of one study participant, "We want men to feel comfortable that they can take the full amount of leave … because we want to level the playing field a bit between the amount of time a woman takes and a man takes."

Employers gave little indication that generous leave policies undermine their ability to maintain business operations during a new parent's absence. Several cited experiences managing through disability leaves taken in the past, while others noted that in spite of the additional compensation for leave-takers, Silicon Valley's high-intensity, accountability-driven corporate cultures will curtail some demand for extensive time off. Demographics also play a role: popular perceptions aside, established tech firms have many workers who are past the age when they are starting a family.

On the other hand, companies felt they could do a better job of helping employees return to work while simultaneously adapting to becoming a new parent, coping with work expectations, dealing with fatigue and stress, and feeling welcomed back as a valued member of their workgroup after a prolonged absence.

While the high tech and financial services sectors have been at the forefront of adopting paid parental leave, recent legislative actions by San Francisco and New York State should motivate other employers to consider the impact of paid parental leave on their competitiveness. "As the economy improves and it becomes harder to find qualified employees, the parental leave arms race could extend beyond Silicon Valley and Wall Street," observes Brian Gifford, the study's lead author and IBI's Director of Research. "Companies need to be ready to adapt if more state and local jurisdictions adopt laws requiring paid parental leave. They also need to understand the point at which they can honestly say 'our benefits meet the needs of our current and future workforce'."

IBI's research highlights key lessons for companies in any industry:

• Design the policy for what your business is trying to accomplish: Prioritize goals such as competing for talent, supporting employees' family situations, ensuring fairness and maintaining high productivity and seek to strike the right balance. Work with supplier partners to ensure that any policies comply with EEOC rules and any state and local laws.

• Leverage FMLA and disability experiences to help maintain business performance: Develop guidance for supervisors who face the temporary absence of a team member. Use current FMLA birth and adoption leaves as a baseline metric for the demand for paid parental leave and measure important business performance metrics before and after the plan goes into effect.

• Focus on improving RTW experiences: Returns from long parental leaves can add even more complexity given the stresses of new parenthood. Transitional periods of part-time scheduling or limited duties can help facilitate a smooth return-to-work experience. Ensure that employees are aware of employee assistance programs, and include resources that address the emotional and logistical concerns of new parents, such as coordinating day-care services, managing new expenses, flexible scheduling, or dependent care assistance programs.

Read the full report here.
Read the executive summary.

About the Integrated Benefits Institute:

The Integrated Benefits Institute (IBI) is a national, nonprofit research and educational organization committed to helping business leaders and policymakers understand the business value of workforce health and recognize the competitive advantages of helping employees get and stay healthy. Founded in 1995, IBI is supported by more than 1,150 member companies representing over 20 million workers. For more information, visit IBI's website. Follow IBI on Twitter and connect on LinkedIn.

CONTACT: Contact Brian Gifford, PhD, Director of Research and Measurement Integrated Benefits Institute Phone: 415-222-7217 Email: bgifford@ibiweb.org
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