Tuesday, May 30, 2023
HomeUncategorizedWorried about a recession?Companies cut paid maternity and paternity leave

Worried about a recession?Companies cut paid maternity and paternity leave

Quiz: What will 53% of companies offer in 2020 vs. only 35% now?

This is according to a survey by the Society for Human Resource Management (SHRM), which also found a decline in paternity leave policies and fewer but not eliminated weeks of paid leave.

This doesn’t seem like a good fit for the workforce, especially since the US lags its European counterparts in paid parental leave. But now that businesses are doing this, there should be at least a bit of logic in why they choose to cut parental leave plans. Here are some theories:

Families are getting smaller

The average American family has 1.93 children. So while people might say they value paid parental leave programs, most people won’t use them while working at your company.

Sure, you can think of that as a big benefit; knowing it looks good, people say they want it, and then they don’t use it much it. Yes, some will have six children, but most will not. So it’s a benefit that doesn’t help most of your employees.

People want paternity leave, but men don’t use it

In 2021, 70% said Fathers should be entitled to paid paternity leave. But even when offered, only 5% of new dads take at least two weeks of paternity leave. Like new moms, new dads are entitled to up to 12 weeks of unpaid paternity leave if they qualify for the FMLA.

While people skip unpaid leave for obvious reasons, cultural issues also play a role. In Sweden, 90% of fathers take paternity leave – with pay. But in the U.S., even men with paid paternity leave don’t do the best they can.

So if you have to cut costs, it seems logical to look at an underutilized program.

Is the cost of increasing retention worth it?

The idea behind companies offering parental leave is not altruism or better social good. (This may be the idea behind government-funded benefits, but these are a minority in the US.) Companies offer paid parental leave because it facilitates recruitment and retention.

Hiring and training employees is expensive and time-consuming. Providing paid maternity leave makes economic sense if it increases the proportion of women who return to work after giving birth. But will it do so?

Young people aged 25-34 (those with children) have an average working experience of only 2.8 years. Is it worth paying for someone who might leave?

Or would it be wiser to offer retention-based benefits to older employees who are more likely to stay approx? (The average tenure for employees aged 55 to 64 is 9.9 years.)

Every business needs to assess whether they would benefit from a paid parental leave program. You might be surprised by what you find.

Should you consider reducing your parental leave scheme?

Reduced parental leave policy sounds like you hate babies everywhere. Indeed, new parents who take time off can have a huge impact. However, if you’re not seeing your retention rate increase or it’s not helping your recruiting, it may be time to focus your efforts elsewhere.

However, since it’s so popular, it’s a risky move that might turn away people who won’t even use the benefits. Carefully assess the consequences of reducing these benefits.

If you don’t offer paid maternity or paternity leave, now may be the time to start – it can help you out in the competition.



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