Does your company want to attract and retain the best staff? Does it want to increase productivity and morale? Does it aspire to be an industry leader? Time to support parental leave.

It’s easy to see why fathers benefit from parental leave. But what about employers?

Believe it or not, employers who provide parental leave for new fathers – and encourage men to actually take it – can actually translate these policies into meaningful gains and cost-savings.

For many businesses, that will be hard to understand: the costs are clear, but the benefits are less obvious.

Yet, surprising number of successful organizations – from Ernst&Young to Hulu to American Express to Ikea – have the facts to prove it. 

So, let’s take a few minutes and break down the argument, in the hopes that both employees and employers can be convinced about the value of parental leave.

Firstly, let’s start by acknowledging one important fact: offering employees paid parental leave costs money and human capital. In an article titled “The Real Costs of Paid Parental Leave”, FastCompany identified three main cost concerns:

  1. The financial costs of hiring a temp to cover the person while he/she is on leave or working part-time
  2. The financial cost of covering full benefits for the employee while he/she is out or working part-time
  3. A potential decrease in overall productivity due to the fact that other team members may need to cover for the person

In some countries, the financial cost is largely absorbed by the state, while in others, the costs accrue primarily to the businesses themselves. In both situations, paid parental leave programs can quickly become expensive to administer. This is particularly true for small companies, who have limited flexibility in terms of financial and human resources.

Pretending these costs don’t exist is foolish. So what’s the upside?

We’ll start with a powerful study published in 2017 by the Boston Consulting Group. It surveyed 250+ businesses and identified important reasons why “paid family leave can deliver significant rewards that outweigh the costs”. I won’t attempt to summarize, because they created a lovely chart:

Not enough? In 2017, Ernst&Young released the findings of their own survey on paid family and medical leave (PFML). For their report, they surveyed over 1,500 US private sector human resource decision-makers and over 3,000 employees, and found that

“employers offering these benefits overwhelmingly (>90%) felt that the effect was positive or neutral, not only on employee-related outcomes such as morale and turnover, but also on operating outcomes such as profitability and productivity”.

The report authors noted that this was of particular interest, “given that the primary concern of those who have not yet adopted PFML benefits is cost.”

Don’t trust big consulting firms like EY or Boston Consulting Group? What about Hulu, the video-on-demand service with annual revenues of $1 billion. In 2016, their SVP of Talent and Organization gave a keynote speech in 2016 where he admitted that Hulu had “used their HR analytics and technology to prove that developing a new maternity/paternity program would increase engagement, loyalty and retention. The money it was going to cost would come back in spades by the increase in these other metrics. Sure it was the “right” thing to do, but it also made financial sense to the organization.”

These aren’t the only large organizations making improvements to parental leave policies. In January 2017, American Express increased paid parental leave to 20 weeks. Similarly, Ikea now allows employees to take up to 24 weeks of parental leave, offering a stepped compensation policy. In Silicon Valley, all of the big names – Google, Amazon, Facebook, Apple and many others – are expanding their parental leave policies. The list keeps growing.

These firms already know the truth: offering parental leave is an investment worth making. Now it’s time for you to convince your employer to join the club. 

Hopefully this post has given you some ideas about how to talk with your employer about the benefits of your planned leave. We would love to hear about your approach and your experience. Please share what you can in the comments section below. Your stories inspire and empower our community!