Why US firms are stepping up to the parental benefits plate

With America still out on offering paid parental leave at a national level, one of very few countries worldwide not paying parents, more businesses are stepping up to the parental plate with extended and paid leave, in a bid to battle the war on talent and ensure organisational diversity.

Among the organisations that have recently upped their parental leave policies are consulting firms Bain and PwC, tech giant Google and retailer Neiman Marcus.

This comes as businesses are increasing efforts post-pandemic to achieve gender parity in the workplace, and as the war on talent and Great Resignation rage on, with four million workers leaving their jobs in April 2022 in the US, to seek out higher salaries and more flexibility, according to the Labor Department.

US is the only rich country without paid parental leave

The US is the only rich country without any guaranteed paid parental leave at a national level. While nine states and the District of Columbia mandate up to 12 weeks for maternity leave, federal law guarantees new parents just six weeks of unpaid time off, and not all workers qualify; while paternity leave and leave for non-birthing parents is not even on the table.

That’s compared to the UK, which offers 39 weeks paid, six weeks at 90% of their salary and the rest at a lower rate. Japan offers 52 weeks, with 67% of salary paid for the first six months and 50% in the second six months; Canada 51 weeks; Sweden 68 weeks, which can be equally split between parents; and Hungary and Finland, a staggering 160 and 161 weeks, respectively.

President Biden has sought to expand access to paid family leave, initially through his Build Back Better package, but this is now on hold, although a growing number of business leaders are calling for congress to tackle paid family leave to help the economy, there is no movement.

Benefits for employees, business and society are great

Research has shown paid parental leave offers inarguable benefits for parents, children and the societies of countries who provide it.

It improves family wellbeing, and improves economics with some studies showing that paid parental leave increases women’s participation in the workforce and reduces gender pay gaps.

When it comes to businesses, the benefits are even greater. In light of the stresses caused by the pandemic, the current war on talent and emphasis on diversity, including women in the workplace has never been more important.

A McKinsey report reveals that parents who have taken parental leave view it as an overwhelmingly positive experience.

To attract and retain talented women, and parents, businesses worldwide are increasing benefits, with extended and paid parental leave a popular one. Not only does paid leave impact both child-rearing and mental wellbeing in the workplace but it shows that a business cares about its workers.

Bain, PwC, Google, Neiman Marcus extend parental leave policies to attract talent

Bain is the latest organisation to relaunch its parental policy, in a bid to compete for scarce talent and as a diversity and equity initiative to help develop and attract the best diverse talent.

The Boston-headquartered management consultancy has extended its paid parental leave for US and Canadian employees to 21 weeks, regardless of gender, with the option to extend to 26 weeks of paid leave with vacation. The new policy covers biological parents, adoption and surrogacy, and further includes coverage for assisted reproductive services, assistance for same-sex couples, and adoption and surrogacy reimbursements.

According to Kara Gruver, Bain’s chief talent officer, equal parent leave for all parents is an “important step to move us forward on gender equity, ensuring all of our people at Bain can thrive, both personally and professionally”.

Bain’s adjustment of its parental policy follows the recent adaptation by PwC to its parental leave policy. Last month, the big four firm extended its parental leave for its 55,000 US employees from eight to 12 weeks. And this comes off the back of KPMG expanding its paid parental leave to 12 weeks last October.

Last month too, retailer Neiman Marcus Group revealed its new parental benefits introducing paid leave of 16 weeks for those experiencing adoption, surrogacy or foster care, and elevating paid leave of 24 weeks for birthing mothers. This is in addition to two weeks offered to all parents for care, when needed.  

At the start of the year, Google delivered a suite of new leave policies, including giving parents who give birth 24 weeks of leave, up from 18 previously, while all parents will be eligible for 18 weeks of leave, up from 12 weeks. In tech terms, Google’s offer is a good one, with Microsoft offering 20 weeks for birth parents and 12 for non-birth, and Meta giving just 16. Netflix is one of the best though, offering unlimited maternity and paternity leave during the first year, whether birth or adoption.

More than just leave – other parental benefits

As companies compete for the best and most diverse talent, parental benefits have beyond just leave to the offer of services, discounts and assistance in all areas of becoming and being a parent.

As well as offering 16 weeks of paid parental leave, EY provides mothers with lactation consultation and supplies at no cost, and family transition coaching for new parents returning to work.

Also ahead of the curve on parenting, Johnson & Johnson offers 17 weeks of paid parental leave, in addition to discounts on childcare centres, and they will even cover the cost of milk delivery to nursing mothers when they travel.

In a similar move, outdoor apparel brand Patagonia pays for nannies to accompany parents on work trips, in addition to 12-16 weeks paid parental leave and onsite childcare. While parental perks at Starbucks include 10 subsidized backup care days each year to help ease the burden of finding last-minute care in the case of unexpected occurrences.

LinkedIn considers both pre- and post-parent stages in their generous offer. As well as giving 20 weeks of paid parental leave, the company covers three Smart Cycles for fertility treatments, including two years of cryopreservation egg storage; US$10,000 for adoption assistance and up to US$20,000 to cover surrogacy expenses. For parents, employees get 10 days of backup childcare and a reimbursement of up to US$2,000 childcare expenses.