When Netflix announced it would give new moms and dads up to a year of paid leave, it started a chain reaction in Silicon Valley. Adobe chimed in with 26 weeks of paid leave for new moms, while Microsoft came in at 20 weeks – both companies also expanded paid leave for non-birth parents. Amazon matched Microsoft’s 20 weeks and said for the first time it would offer non-birth parents paid time off as well.
While many attributed the outburst of newfound generosity to stiff competition in the market for talented tech workers, 2015 was a watershed year for leave policies outside of Silicon Valley as well, Bloomberg BNA reports:
“Among the corporations that announced new or revised employer-paid family leave policies last year were Vodafone, Accenture, Johnson & Johnson, Nestle, Netflix, Microsoft, Adobe, Hilton Worldwide, M&T Bank, Amazon, Stonyfield Farm, Zillow, Spotify, Facebook, Credit Suisse Group, eBay and PayPal, according to research compiled by the Center for Law and Social Policy and the National Partnership for Women and Families.”
While the difficulty of hiring and retaining the best tech talent surely played a role in the groundswell, experts say the desire among many Millennials for work-life balance means that while the trend may have started in youth-dominated Silicon Valley, it’s spread is inevitable.
BNA reports: “It may be what’s necessary to keep talent in the youth-dominated digital world, according to Carol Sladek, a benefits consultant with 29 years in human resources. She says new parents in the 21st century have different expectations for parental leave.”
“I think that there are some generational differences,” Sladek says. “I think certainly we have all heard about Millennials and how they are approaching the workforce differently.”
“Which means what Netflix announced might be the most extreme version of a trend that will be felt far beyond Silicon Valley.”
Sladek goes on to note that while family leave policies might be the way Silicon Valley offers work-life balance; other industries may find alternative solutions:
“The goal for all may be work-life balance, but that could be better achieved for some companies through flex-time and vacation policies, as opposed to expanding paid maternity leave.”
But while moneyed tech giants might be able afford to be generous, executives in more cash-strapped sectors have long questioned weather these policies are financially prudent. Food and beverage conglomerate Nestle is out to prove they are, Fortune reports:
“The company announced that it is launching a study that will collect data on the number of employees who use its parental leave and protection policy and how many of those employees remain at Nestle six, 12 and 18 months after returning from leave.”
The company is banking on the idea that it costs less to offer working parents paid leave than to replace them, and there’s already research to back that up, Fortune:
“According to the left-leaning think tank Center for American Progress, the average cost of replacing an employee is 21% of their salary. What’s more, that percentage gets even larger when you zero in on executives and other highly-skilled workers.
With a workforce of 51,000 in the United States and over 300,000 around the world, Nestle says it can provide a significant sample size to determine the impact that parental leave policies have on employee retention.”
Paul Bakus, president of Nestle corporate affairs, said that while he supports legislation to require companies to offer paid leave, the private sector needs to step up in the meantime, Fortune reports:
“We would be for legislation that mandates a change, but absent that, we feel like the private sector has to play a bigger role in setting the pace or the direction of bringing this issue to the forefront,” he says “True, meaningful change is happening in the workplace, regardless of what the government does.”
Over 200 business school faculty members agree with Bakus, CNN Money reports:
“A letter signed by 203 professionals from 88 business schools across the country was sent to Congress on Tuesday urging them to pass the Family and Medical Insurance Leave Act (FAMILY Act).
The FAMILY Act would create an insurance program that offers 12 weeks of leave for family and medical purposes with partial pay. The program would have a structure similar to that of Social Security: funded through payroll contributions and covering companies of all sizes.
While there is no federal mandate, California, New Jersey and Rhode Island have paid family leave insurance programs, and some companies have been enhancing their parental benefits.”