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5 important questions to ask about paid parental leave

Under federal law, there’s no mandate for an employer to offer compensated time off to mothers and fathers following the birth or adoption of a child. But a few states have mandatory paid parental leave laws on the books, and it’s a topic that still gets a fair amount of news coverage. If your organization wishes to explore the idea, here are five important questions to ask:

1. Which job categories or demographic segments of your workforce are most vital to your success? For example, you may find that the group you most rely on is composed of younger employees who are more likely to need parental leave. Or you may look at your workforce demographics and hiring trends and realize that your need for younger workers may soon increase.

2. What motivates the workers who are most vital to your success? It’s possible that the employees who are most likely to take advantage of paid parental leave would place a higher value on some other form of compensation, such as more generous paid vacations. Employee surveys can be excellent tools for ascertaining such preferences.

3. What’s the competitive landscape in your labor market? If you’re not having a turnover problem or if your competitors aren’t offering paid family leave, you may not feel compelled to consider it. Fair enough; but keep an eye on the competition so you don’t get left behind.

4. What’s your overall employment strategy and workplace culture? Many employers’ primary employment value proposition is schedule and career flexibility, as well as a “family friendly” culture. Paid family leave is a natural fit for such cultures and would likely get plenty of positive attention when you roll it out.

5. Do the numbers add up? It’s not easy, but you can estimate the additional labor costs involved in covering for those on parental leaves while also valuing the financial savings in reduced employee turnover and higher productivity levels. If you move forward with a paid parental leave policy, you’ll be able to verify and adjust these estimates after you have accumulated some history. In turn, you can then revise the policy for an optimal fit.

The Society for Human Resource Management’s 2018 Employee Benefits: The Evolution of Benefits report stated: “The prevalence of paid parental leave increased significantly between 2016 and 2018 for every type of parental leave.” Whether this trend will continue depends on the conclusions employers draw as they consider the questions above and other factors beyond their control, including the future strength of the economy and birth rate trends. Contact us for more information about performing the analyses that will help you determine whether parental leave is a good idea for your organization.

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