Why parental leave and flexible working makes sense

Employers may find it difficult to see the commercial benefit of offering parental leave to dads whose partners are returning to work...elsewhere. Why should the company employing the dad pay 10 or even 18 weeks of wages so that their partner can return to work at a different company? If the company employs both parents of a dual career couple, why would the employer want to pay double the time of primary carer leave while each partner takes turn looking after the baby? The real question being asked by the employer here is, ‘What return am I getting for the cost of X weeks worth of wages?’

Employers often ask a similar question regarding employee training - 'What return am I getting for the cost of training, especially for courses that assist staff in getting a job elsewhere?' Employers who know the true value of their employees understand that investing in things like training actually has broader positive impacts on employee engagement, motivation, culture, and ultimately employee productivity. Richard Branson summed this up perfectly when he said:

“Train people well enough so they can leave, treat them well enough, so they don't want to.”

In a similar way, treating male and female employees equally in regards to parental leave signals to employees that the company cares about them and is willing to invest in them as a person, not just as a human resource. It tells employees that the employer cares about their stage of life and is investing in them and their potential over the long term. It recognises the value of diversity and shows that equality in the workplace is not just about meeting gender quotas.

Organisations with parental leave for dads experience higher engagement and are better at attracting and retaining top talent

Parental leave is a powerful tool for attracting and retaining top talent, particularly among millennials. A lack of parental leave and flexible working options is a key factor impacting attrition rates of organisations. Organisations that offer parental leave and flexible working options experience greater productivity by their employees and parents returning to work. Embedding these policies and practices also adds value to the employer's brand, with staff more likely to recommend the organisation to others as a great place to work.

In a US study into highly educated professional fathers, 9 out of 10 dads reported paid parental leave would be important when looking for a new employer (Harrington et al, 2014). This rate was even higher for millennial workers, that will soon make up over 75% of the workforce.

In fact for Millennials, the top 5 most important things when finding a new job are:

Competitive pay and benefits (80%)
Being able to work flexibly and still be on track for promotion (75%)
Receiving paid parental leave (74%)
Working with colleagues, including my boss, who support my efforts to work flexibly to meet both my professional and personal goals (74%)
The ability to work flexibly informally when needed (71%).

Four of these top five relate to parental leave and flexible working options. What's more, if the company offers flexibility and paid parental leave, potential recruits are more likely to join the company (83%), while existing employees are:

more likely to recommend that company to others (69%)
more engaged and happier (79%)
less likely to quit (86%), and
more likely to work longer hours (80%).

Parental leave and flexible working are powerful tools for attracting and retaining top talent and ultimately correlate with higher levels of engagement and productivity. So the return on investment for employers offering parental leave far outweighs the cost of the paid parental leave period! Even considering that employees are less likely to quit if parental leave is offered, the cost of 18 weeks parental leave is far less than the the cost of losing an employee, which can range from tens of thousands of dollars to 1.5-2X annual salary when factoring the costs of:

hiring a new employee
onboarding the new employee
lost productivity from the time it takes the new employee to reach the same productivity level of the exited employee
errors of the new employee and impacts to customer service while the new employee reaches the required level of productivity; and
lost engagement of other employees witnessing the turnover.

Not offering equal parental leave may even pose as a potential legal risk for organisations, with JP Morgan Chase currently being sued in the US for sex discrimination. JP Morgan Chase's parental leave policy presumes that birth mothers will be the baby’s primary caregiver, and only permits a male employee the full sixteen weeks of paid leave in only special circumstances (otherwise only being entitled to 2 weeks leave).

Organisations daunted by cost of providing equal parental leave should actually be daunted by the real cost of NOT providing equal parental leave.

Helping women re-enter the workforce is key to economic growth and prosperity

With 52% of Australian women claiming to be the household's primary earner, the solution to who is best placed to stay at home to raise the children, at least from an economic perspective, is not as clear cut as it once was. The significance of this issue for families will continue to grow as equal opportunities for women in education and work is attained. Yet many organisations are still ultimately limiting the role highly skilled women can play economically by refusing dads access to equal parental leave benefits, or in many cases, any parental leave options at all.

Achieving equality in parental leave is not solely about the rights of dads. Enabling dads access to primary carer leave gives parents the ability to choose how to balance or share the economic and impacts that are synonymous with taking time out of a career to raise a child. Parental leave policies that define primary carers as the mother only (including the government’s Paid Parental Leave (PPL) Scheme) forces mothers to carry the bulk of this burden.

A significant contributing factor to the gender pay gap is the impact having children has on a woman’s career. Women are impacted directly by:

Missed opportunities for promotion during the time spent on maternity leave
Assumptions that women will need a sustained period of time upon returning to work to get back into working life
Assumptions that mothers won’t want to be promoted or take on additional responsibilities during their child’s earlier years as they will want to prioritise their family ahead of work
The natural stalling of pay increases and bonuses during absence through maternity leave and perceived ‘low performance’ for the initial period when returning to work

Women’s careers can also be indirectly impacted when it comes to decision making on hiring or promoting women in their mid-twenties and to mid-thirties, being perceived as a higher risk than a man due to the potential to want to start a family. Although such rationale is rarely recorded due to the risk to the employer for litigation due to discrimination, this type of discrimination is real. In fact, 91% of Australian mothers have experienced some type of discrimination in their workplace as a direct result of their pregnancy.

Promoting parental leave for dads takes a significant step in leveling the the playing field by enabling parents to choose how to share the impact across both careers. If employers perceive the level of risk that either a man or woman may take time out to raise a family as being equal, then this by default will remove the the potential for gender discrimination in the decision.

Similarly, many women receiving paid parental leave will also transition into unpaid leave (or take extended maternity leave at half pay) to increase the time their child has with a parent before having to make childcare arrangements. In Australia, the average length of time that women spend out of the workforce for their child’s birth is 32 weeks, 14 weeks longer than the government’s paid parental leave scheme. Many also return part time If a dad is able to take parental leave at the completion of the mother’s parental leave, the mother has the option of returning to work sooner, reducing the time that and extent to which her career progression is impacted.

Taking an holistic, equality-based view of parental leave policies therefore benefits mums and dads alike. This also highlights the dangers in both governments and organisations not acknowledging and supporting the parenting ecosystem holistically, as the current gender based approach actually extenuates the gender equality gap with further ramifications to families and children more broadly.