Paid parental leave has been a topic of interest for employers and employees alike for years. Even the name has undergone a metamorphosis from maternity leave to parental leave. This is an effort to recognize that raising children isn’t a side issue or a women’s issue, but rather an economic priority that affects all families. However, regulations and common business practices have lagged behind societal expectations.
The Costs of Paid Parental Leave
The most often cited reason for not offering paid parental leave is the cost associated with it. However, several studies have shown the cost isn’t what employers think. For example, California implemented paid parental leave at the state level about fifteen years ago. New Jersey has a similar program that’s around a decade old and Rhode Island began a paid parental leave program in 2014.
The benefits of these programs for businesses have been numerous and clear:
- Low-income families are able to take time off following the birth of a child rather than returning to work straight away due to financial constraints. Having this paid time off to recover from labor as well as bond with their baby means mothers are more likely to return to the workforce as well. Without this leave, women are more likely to stop working altogether—which means their employer now has to take on the burden of finding new, qualified candidates and train them. The cost and time associated with talent acquisition and training add up quickly.
- Women who take paid leave are likely to work more hours and advance their careers upon returning to work than those who do not. Not only that, the benefits of taking paid leave compound over time. Women who received paid parental leave work 15-20% more hours in the second year of their child’s life compared to their colleagues who do not take leave. They also earn around 5% more on average as well.
- For companies, their bottom line often drives many of their decisions. In California, 87% of businesses reported that paid leave had not increased their costs while 9% reported they saved money due to less turnover.
Offering paid parental leave is a major incentive for millennials as many of them are growing or looking to start their families. Seeing as they represent the largest portion of the workforce, it’s no wonder this topic has been gaining support. With fiercer competition than ever, employers need to find a way to differentiate themselves from rival businesses without taking on undue financial risk. Contact the experts at MMA Florida to learn more about cultivating your benefits packages and plans.