The benefits of paid family leave far outweigh the risks

U.S. businesses and Congress are finally paying more attention to the need for paid family leave nationwide. It has been found that paid family leave can help companies improve their productivity, performance and profits. Yet the United States is the only wealthy country without a national paid family leave program. Only the United States and five very small countries do not have paid maternity leave nationally, and only 11 countries, including the United States, do not offer nationally paid medical and parental leave.

But with the growing calls for a national plan comes a growing concern among some executives: How do you cover someone’s workload while they are away? It’s a question people from all kinds of industries ask me often.

There are widely held assumptions that allowing workers to automatically take paid time off means that other members of the company have to take on more work without being rewarded for doing so. But it doesn’t have to be like that.

Paid family leave (PFL), a term commonly used to refer to paid family and medical leave, allows workers to care for a loved one or themselves during illness and in certain other circumstances, such as when an adoption or a child. As part of a national program, all workers could use the PFL. But right now, only nine US states offer it. These states have a public insurance program to cover a worker’s leave, so companies do not pay a person’s wages or salaries while they take leave. Instead, businesses can use this unspent money to cover the cost of someone replacing or paying other employees overtime, or just saving it.

Many companies offer some form of this benefit. According to the Society for Human Resource Management, about 35% of companies offer their own “paid extended family care leave,” which is time off to care for a sick partner, parent or child. Regarding paid maternity leave, 55% offer it (including in the nine states where it is compulsory; 39% do so voluntarily in the states where it is not compulsory). And 45% offer paid paternity leave (31% in states where it’s not mandatory). Although companies pay wages during holidays when there is no public program in place, they ultimately save money, in part through attraction and retention.

Colleagues see a benefit, not a burden

Most workers are actually happy to support their colleagues who go on family leave. In a September 2020 FinanceBuzz survey, half of workers said they would be happy to participate and work overtime to cover parents on paid family leave. And in a study of paid family leave in New Jersey, researchers Sharon Lerner and Eileen Appelbaum found that the state’s PFL program boosts morale in those who take the leave. and their coworkers. Some business leaders and human resources professionals “expected employees to balk at coworkers’ leave, but have not witnessed such resentment,” the report found. A vice president of HR told the researchers: “People understand that ‘it could be me’. I never heard a growl.

Although companies pay wages during paid family leave when there is no public program in place, they ultimately save money, in part through attraction and retention.

In fact, the National Partnership for Women and Families notes that in a survey of California workers who reported having a coworker who took family leave, 69% said the coworker’s leave had no effect on them, and 25% cited a positive effect.

I’ve found that the positive effects often come in part from the good feeling employees have that the company allows time off, and in part from the sense of teamwork instilled by mutually supportive colleagues. Additionally, when people, especially those at higher rank, take family leave, it gives lower rank workers a chance to advance and demonstrate their leadership skills. (This is also the case when executives reduce their hours, for example by taking four-day weeks and giving others the chance to lead one day a week.)

Workload planning

While workers aren’t afraid to cover their colleagues who use paid family leave, companies can’t – and don’t need to – rely solely on volunteerism to fill temporary workforce gaps.

Many types of paid family leave, including maternity and paternity leave, can be planned well in advance. When the company has a supportive culture, employees are generally comfortable telling their managers that they have an upcoming baby or are looking to adopt and that they could get a call anytime. day. This gives managers time to sit down with the worker who will be taking paid time off and define their responsibilities that need to be covered.

Businesses should then review their budgets to determine opportunities to hire additional staff or pay overtime. Even – perhaps most importantly – in states without a public insurance program, it’s critical that business leaders keep in mind the financial benefit of offering paid family leave. Without it, workers are more likely to leave the company, studies show. And it can cost up to 200% of an employee’s annual salary to replace them, a huge sum compared to the cost of covering extra work while on leave.

Rewrite the social contract

Setting up paid family leave in your company works best when presented as part of a new social contract with employees. As David Osborne, former CEO of the Virgin Pulse workplace wellness program, explains, “The old deal whereby employees would work for a company in exchange for a salary, health insurance and little money. others sufficed as an agreeable social contract for both parties for decades. Today, however, 56 million Millennials and 61 million future Gen Z workers are redefining the terms of the contract. “

Today’s workers prefer to work for companies that promote well-being. Calls for mental health supports, wellness programs, flexibility and more are on the rise. For many workers, paid family leave is part of a modern social contract. It is therefore not surprising that these policies help to increase productivity, profitability and employee satisfaction. A July study also found that when paid family leave is available, companies experience higher rates of innovation, in part by retaining more women and attracting more young workers willing to invent. Additionally, the Center for American Progress found that California’s paid vacation program resulted in a 14% increase in labor force participation.

Nationally, paid family leave still faces many obstacles, so we don’t know what the immediate future holds. But those of us who are committed to making it happen have reason to hope. Support is increasing. And in the meantime, companies can set up their own plans to make it more mainstream. It will take some organization to adapt. But the benefits of making it work will far outweigh the challenges.

About Perry Perrie

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