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  • Writer's pictureNua Team

Five Ways Parental Leave Can Improve Culture And Increase Diversity In Organizations

There are many known benefits available to employees who receive and organizations that offer parental leave, but the ways it can improve diversity in the workplace are often overlooked.

The United States is the only developed country in the world that does not have a national parental leave policy. On a federal level, America offers 12 weeks of unpaid leave to workers without the threat of losing their job under the 1993 Family Medical Act; however, this only applies to full-time employees who have worked at least 1,250 hours at companies with more than 50 employees. Compare this to Estonia, which offers 20 weeks of fully paid parental leave, Chile with 18 weeks, Austria with 16 weeks and Germany with 14 weeks.

On a state level, New Jersey, California, New York and Rhode Island offer partial wage replacement for paid parental leave (additionally, some companies provide for significant additional unpaid leave beyond the federal and state requirements). There are also various legislative proposals to enact paid family leave programs and offer tax credits for companies that provide them. Yet in most cases, it’s up to companies to decide what time off new parents can take and what compensation they are offered during that time. According to survey data, one in three companies in the U.S. offer parental leave policies, and that number is growing.

While research shows that paid parental leave policies reduce employee turnover rate, encourage productivity and attract and retain talent, they also offer often-overlooked benefits of promoting diversity and inclusion. Here are five ways that parental leave can improve diversity in companies.

1. Parental leave encourages gender equality through a gender-neutral approach.

Companies often follow the conventional approach and perception of how families are formed and how parental responsibilities are distributed, offering maternity leave to mothers (“primary caretakers”) while overlooking fathers (“secondary caretakers”). It is important, however, not to assume a specific gender of a primary caretaker when designing parental leave policies.

Companies should offer the same duration of paid leave to both parents, on top of the birth-parent leave (or maternity leave), so both can bond with and care for their newly born or adopted child. This approach eliminates the gender-based “primary” and “secondary” designations and promotes equality.

2. Gender-neutral parental leave policies encourage both parents to take time to understand what childcare truly involves (Hint: It’s not a holiday or vacation).

Men have been hesitant to take parental leave for fear of work penalties and the stigma surrounding it. The median duration of paid parental leave that men take is only one week, compared to 11 weeks for women. Seven out of 10 men disclosed they took a maximum of two weeks off work after the adoption or birth of a child, and almost 60% reported they wished they had taken more time.

Research in Iceland proved that men who take at least two weeks of parental leave are more likely to be involved in caretaking activities including diaper changing and feeding. They are also more likely to understand a child’s needs and what goes into caring for a child. Long-term, they are more hands-on throughout the child’s life.

Moreover, studies show that when men take parental leave, women can go back to work sooner, which can benefit their salary and increase their chances to be promoted. Increased awareness of caregiver needs can also improve the overall relationships and attitude in the workplace, improving empathy, flexibility and collaboration.

3. Getting employees to take their parental leave improves succession planning.

For employers, the practice of employees taking leave creates the opportunity for management to test possible succession scenarios and build the skills of other employees.

By encouraging employees to take full parental leave, companies can provide learning and development opportunities for employees who step in to cover their work, and at the same time inform their succession planning. A gender-neutral approach allows more opportunity for others to step in as well.

4. Offering parental leave policies helps attract and retain diverse employees.

Parental leave benefits signal to the market that the company cares about its employees — a value that helps attract diverse talent. For instance, millennials are expected to make up 75% of the global workforce by 2025, and many are in partnerships where both people work and parent. According to Ernst & Young’s global generational survey, 83% of millennials said they would join a company that offered good parental leave benefits, and 38% said they would move out of the U.S. to another country that had better parental leave policies.

5. Paid parental leave helps close the gender wage gap.

Traditionally, men have been the breadwinners, and women have been the caretakers who take time off to care for children. When men participate in childcare and use parental leave, women can focus on their work, be fully present in the workplace and progress in their careers.

A 2016 analysis showed that New Jersey's state-paid parental leave policy has assisted in closing the wage gap, and Swedish research has proven for every month a father is on paid parental leave, it has a more prominent positive correlation on the mother’s income than if she cut her leave by the same amount of time.

As companies compete for talent and constantly look for ways to grow the business, having a diverse workforce is essential to business success. There is enough research and anecdotal evidence from around the world that demonstrates the benefits of gender-neutral parental leave policies on improving workforce diversity. It’s a benefit that should not be overlooked.

The article was originally published in Forbes magazine.

About the author

Chris Renz is a co-founder of Nua Group, a human resources advisory firm based in San Francisco. Chris has more than 20 years of experience helping organizations of all sizes and industries address their most significant benefits challenges. He has helped Fortune-500 companies develop market-leading programs and guided smaller firms as they scale programs to match their growth.

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