“A leading practice parental leave policy allows women and men to both identify as the primary carer. Leading policies will reduce employee turn over … and boost employee engagement and productivity. Every time someone leaves your organisation, it costs you money. [Parental leave equality] is a smart solution to this.”
Libby Lyons, Director of Workplace Gender Equality Agency (WGEA)
Speaker at Parents At Work’s Advancing Parental Leave Equality for Australian Fathers Business Leader Forum, Melbourne, 31st August 2018.
This whitepaper has been developed alongside WGEA’s recently launched Best Practice Guide – Developing a Leading Practice Parental Guide Policy.
In the paper, we discuss shared care and how aside from potentially delivering a more equal division of unpaid care and paid work, promoting shared care is also unequivocally good for business.
The commercial beneﬁts associated with the provision of paid parental leave are well established and lead many employers to report that the rewards outweigh the costs.
Leading employers in Australia offering equal parental leave benefits regardless of gender include:
These organisations have reformed their policies to eliminate primary and secondary carer definitions, allow their employees to share the care and take leave flexibly (e.g. in blocks or 1 day per week), as well as extending the time period the leave can be taken (up to 36 months).
The retention of talent and lower rates of staff turnover, resulting in lower recruitment and training costs, is a key reason some employers provide paid family leave. In many instances, companies determine it is more cost-effective to pay parents to go on parental leave than it is to lose them. Women who take paid leave are 93% more likely to be in the workforce 9 to 12 months after a child’s birth than women who take no leave.
As demand grows for paid parental leave, these policies are an increasingly relevant differentiator. A 2016 survey by Deloitte found that 77% of employees with access to beneﬁts reported that the amount of paid parental leave had some inﬂuence on their choice of one employer over another.
Improved Engagement, Morale, and Productivity
A 2017 study by BCG showed that providing paid family leave translates into better employee engagement, morale, and productivity. A 2016 EY study of more than 1,500 employers found that more than 80% of companies that offer paid family leave reported a positive impact on employee morale, and more than 70% reported an increase in employee productivity.
Reinforced Company Values & Increased Brand Equity
Paid parental leave is a powerful signal that a company is genuinely committed to its employees. BCG evidence shows that many American organisations that offer PPL do so because it reinforces company values. Aside from potentially being recognised as an employer of choice, companies that offer generous and innovative parental leave policies are increasingly likely to be showcased favourably in the media. In 2018 Medibank Private and L’Oreal both introduced 14 weeks of paid parental leave to all new parents regardless of whether they are the primary or secondary carers, and both garnered considerable positive media coverage as a result.
It is cost-effective
American researchers surveyed 253 employers and 500 individuals about their experiences with paid parental leave and the majority of employers responded that the program had minimal effects on their business operations; 87% said it had not resulted in any cost increases.
What about small businesses?
In the American research mentioned previously, small businesses – those with 100 employees or fewer – were even less likely to report negative effects of paid family leave than larger organisations. Of the survey respondents with fewer than 50 employees:
- 91% said the paid family leave had a ‘positive effect’ or ‘no noticeable effect’ on proﬁtability and performance
- 89% said the paid family leave had a ‘positive effect’ or ‘no noticeable effect’ on productivity.
- 92% said the paid family leave had a ‘positive effect’ or ‘no noticeable effect’ on turnover
- 99% said the paid family leave had a ‘positive effect’ or ‘no noticeable effect’ on morale
When parental leave policies encourage and allow men to take on more caregiving at home, employers can also benefit from a corresponding increase in women’s participation at work. An uptake in the number of men caring will ease the motherhood penalty that women face.
At a national level, best practice parental leave policies can help improve women’s workforce participation rates, narrow the pay gap, deliver increased productivity and enable more families to more readily combine their work and caring responsibilities.
Read more about the whitepaper and the case for equal parental leave and shared care here.
If you would like a free phone consultation to discuss how Parents At Work can support your organisation and help you improve its best practice status, please email email@example.com.