THE BENEFIT THAT MATTERS
As you’ve read, our parental leave policies in this country are nothing short of shameful. The research validating the importance of providing deeply engaged care that first year of life is by now undisputable, but rather than investing in the next generation, we have an unjust system that punishes children and their parents. Sure, those lucky enough to live in the right states or work for the right companies have paid leave, but the rest of us do not. Only 9 percent of companies offer full paid leave, although 56 percent of companies with at least fifty employees do offer some pay. Guess that’s better than nothing.
The reasons all companies don’t offer full pay is that they claim paid parental leave is too hard a hit to the bottom line. But losing an employee because you don’t offer this competitive benefit can be a significant financial hit as well. When an employee leaves, there are the costs to recruit, hire, and train their replacement, and the lost productivity while the new employee gets up to speed. According to the Center for American Progress, it costs at least 20 percent of an employee’s salary to replace a white-collar worker.
Chris Duchesne, vice president of Global Workplace Solutions at Care.com, said companies “don’t understand they’ll often have to pay more if talented, skilled, and very valuable employees leave. These kinds of programs (paid parental leave) make employees all the more engaged, all the more loyal. For women, if they take leave available to them, they feel the company is more supportive and is invested in their future, and they will more than likely return to the same company.”206
He’s right. Research has shown again and again that women who take paid leave have strong attachments to work. Specifically, women who take paid leave are more likely to be working nine to twelve months after a child’s birth than are those who take no leave at all.207 So if companies want to keep women working and keep them working at their company, paid leave is one obvious solution.
Meanwhile, companies that do offer paid leave don’t suffer financially. In my home state of California, where we’ve had a paid leave program since the mid-1990s, 89 percent of businesses report no increased costs as a result of the mandatory leave program And, 9 percent report paid leave actually generated cost savings for their businesses by reducing employee turnover and/or reducing their own benefit costs.208 Now, to be fair, California’s leave program is paid via tax dollars, not from company coffers. But the state program covers only six weeks of leave at approximately 50 percent of one’s pay. Many California companies cover the delta to ensure their employees are fully paid while out, and some even complement that state paid maternity leave with an extended one of their own. They wisely see it as a strategic cost of doing business.
The other thing to note is that there are benefits to society overall when women get paid leave. As we’ve seen, professional women are much more likely to return to work when they have paid leave. For those who are not working in professional jobs, there are still huge benefits to providing paid maternity leave. A study out of California revealed under-resourced moms have a 39 percent lower likelihood of receiving public assistance and a 40 percent lower likelihood of food stamp receipt in the year following the birth of a new baby when they have paid maternity leave.209 Arguably, if we want to get rid of those “welfare queens,” the best way to do that is to offer paid maternity leave.
The good news is our government is beginning to figure this out. Well, sort of. As of 2015, our military now offers women eighteen weeks of paid maternity leave,210 up from six weeks previously. So across this country, we don’t all get paid leave, but at least our military personnel do. When the government announced the change, Jane Waldfogel, a professor at Columbia University’s School of Social Work, said, “This now sets a new standard which I think other companies, other employers and other employees will start paying attention to.”211
They are. When Google expanded its paid maternity leave to four months, it saw a 50 percent reduction in women leaving the company after having a baby. Other tech companies are now extending paid leave to as much as a year.
This sounds great in theory, but there’s a big potential problem with offering new mothers lengthy paid maternity leaves: It can increase motherhood bias. Managers may not want to hire women who might take the leave or may penalize women who do. So even if a company offers this seemingly great benefit, the net effect could be that we see fewer women hired and fewer women promoted.
How do we offer women longer leaves, but ensure we don’t increase the risk of motherhood bias? Give men leave too. If men are just as likely to be out when a child is born, then penalizing women for taking leave becomes less of an issue.
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And the benefits of paternity leave go on and on. As we saw in the last chapter, men who take it are more likely to be engaged fathers, and their wives are more likely to return to work and to stay working longer. A study by the Swedish Institute for Labor Market Policy Evaluation in 2010 found that a mother’s future earnings rose 7 percent when their partners took paternity leave.212 Additionally, a report from the Rutgers Center for Women and Work indicated that the families of men who took family leave have a significantly lower likelihood of receiving public assistance and food stamps in the year following the child’s birth, when compared to those who return to work and take no family leave at all.213
Here’s the challenge: We know that the vast majority of fathers don’t take leave even when it’s offered. So how do we get them to take it? It’s simple: Give them a stronger incentive money.
In the mid-1990s in Sweden, moms and dads could share leave, but fathers weren’t taking the leave offered. Then the government instituted a use-it-or-lose-it policy targeted exclusively at dads. The country didn’t make paternity leave mandatory, but couples lost a month of subsidized leave if the father took less than a month off. That meant he could no longer transfer all of his leave to his wife. The new policy also compensated fathers and mothers at 90 percent of their wages, making it harder for fathers to turn it down. It would be like throwing money away. Within five years, four out of every five new dads was taking paternity leave.214 Similar use-it-or-lose-it programs were launched in Canada and Norway to equally robust results. On our shores, a 2015 study in California revealed that, if paid, a father was 46 percent more likely to take leave than if he was not offered pay.
Paid paternity leave may be THE key workplace benefit for retaining both male and female high-skilled workers.215 In a 2014 study of highly educated professional fathers in the United States, nine of out ten reported paid paternity leave was “important” when considering a new job, and six out of ten considered it “very or extremely important.” For Millennial workers, the data was even stronger, with over 90 percent indicating it was extremely important.
Paid paternity leave may be THE key workplace benefit for retaining both male and female high-skilled workers.
If we want to keep more moms working and if companies want to attract and retain Millenial talent, the single best benefit they can offer is paid parental leave.
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