September 10, 2015

Parental leave policies: HR’s perspective

As unemployment continues to drop, employers have found themselves back in a familiar pre-recession dilemma: weak employee retention strategies. During the recession, employees were more focused on how to keep their jobs than employers were on how to keep their employees. Due to this, many companies “got by” with the traditional benefits packages including health, dental, life, retirement plans and time off. Today, people are more easily changing jobs and millennials are entering the market. This combination is setting a new standard of “best places to work” and what “work-life balance” means to today’s workforce.

One major change in company benefits is the shift occurring with parental leave policies. While federal law remains unchanged related to the Family and Medical Leave Act (FMLA) job protection for mothers, states like Massachusetts, California, Oregon and Connecticut have initiated required paid sick leave laws. In addition, New Jersey, California and Rhode Island have paved the way for paid FMLA-type laws. This trend stretches beyond our U.S. borders as many countries are evaluating these same policies to be more inclusive for mothers and fathers, often including paid requirements.

Recognizing the increased competition to attract and retain quality employees, the U.S. tech industry has been leading the pack to make these changes. Soon, companies big and small will see this as a critical component to their benefits package to maintain retention. As employers contemplate making these changes, they should consider these factors:

  • Be unique but competitive: Getting creative with your benefits can give you a competitive edge for attracting and retaining the right employees. However, benefits can often become confusing or imbalanced if the benefits offered don’t match people’s needs. Consider your environment and understand the benefits that will have the most positive effect.
  • Inclusive exclusivity: While parental leave is specific to parenthood, it is important to recognize that “parenthood” can be widely interpreted today. In any policy, define the plan with details. For example, include not only birth, but adoption, foster care, new legal guardianship, etc. to ensure employees understand what the policy entails. Also, define eligible individuals and consider including both new moms and new dads.

Before creating any plan, it is critical to consider the workplace needs of today and the future. Creativity can be advantageous and many employers have found alternative ways of offering benefits through donation policies, high carryover options, etc. When developing these types of plans, collect best practices, ensure they are competitive with your market and test the policy. Through testing, you can identify gaps, potential financial liabilities, areas for improvement, disparate impact risks and other items that could affect the success of these types of plans. Lastly, always remember to check current local, state and federal law in this continually changing environment!

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