In 1993, the Family and Medical Leave Act (FMLA) set a baseline regarding employees' ability to step away temporarily from their jobs to tend to family-related matters. FMLA guarantees up to 12 weeks of unpaid leave — with the continuation of employee benefits — for qualified family and medical reasons at firms with more than 50 employees.
In the years that followed, California, New Jersey and Rhode Island all enacted legislation for paid medical and parental leave, according to a 2014 White House Council of Economic Advisers report. These states pay between 55 and 66 percent of an employee's weekly salary, up to a maximum determined by each state. Some private companies have chosen to offer similar paid-leave programs under certain circumstances. These generally kick in once an employee's paid vacation time has been exhausted and pay a percentage of the person's salary for a prescribed period.
With middle market firms competing for talent, it's wise to closely examine a paid-leave policy for qualified medical and family purposes. According to CNBC, studies have shown that the under-35 segment of the workforce is more focused than previous generations on quality of life as a factor in their employment choices. On the flip side, longer average life spans mean that the over-40 segment of the workforce is more involved than ever in caring for aging parents. Based on all this, executives at midsized companies must think about how paid parental leave policies and family-focused measures help lure and retain employees at a sustainable cost.
Building a Parental Leave Program
Skeptics of paid leave believe that such practices are costly and place an unfair burden on employers. However, the White House report argues, events that would trigger use of paid leave after exhausting paid vacation are infrequent, and "evidence from the states that have paid-leave policies as well as other developed countries shows that these policies do not cause undue workplace interruptions. Further, a body of research finds that these practices can benefit employers by improving their ability to recruit and retain talent, lowering turnover and minimizing loss of firm-specific skills and human capital as well as boosting morale and worker productivity."
The report went on to say that paid-leave policies also help businesses recruit talented workers who plan to stay after having children. It cited a survey where two-thirds of 200 human resources managers said family-supportive policies were the single most important factor in attracting and retaining employees. Additionally, "paid leave has also been shown to increase the probability that women continue in their job after having a child, rather than quitting permanently," saving a firm institutional knowledge and long-term revenue.
To gauge the potential need for or employee interest in paid leave, executives should conduct a demographic assessment of their workforce, followed by an anonymous employee survey. These might reveal that there are a considerable number of people interested in having and raising children, or who have aging parents. The White House report states that the share of population aged 65 and older is larger today than at any point during the 20th century. "For people of those ages, unpaid family caregiving is the most common source of long-term care: About 16 percent of the population aged 15 and older provided unpaid eldercare" as of 2012.
Keep in mind that statistics do not show high paid-leave program participation when paid vacation days are used first. As a result, by simply offering a program, a midsized firm competing for talent could differentiate itself with little cost. One other tactic is to conduct a workflow assessment for each department to understand how any employee might be able to work outside the office for a period of time. This could be desirable to those who otherwise would have to use the paid-leave program and thus draw only a fraction of their salary.
Workplace Daycare Partnerships: Satisfying Employee Needs at a Reduced Cost
Most midsized companies won't have an exclusive daycare facility for their employees' children because the rate of use would rarely justify the cost. However, studies have shown a link between on-site child care facilities and reduced employee absenteeism; a Pennsylvania Department of Human Services report says that employees with young children lose up to eight days of work per year because of child care issues.
As an alternative, a firm could investigate the daycare options nearby companies provide and seek a use agreement for its own employees. Aside from cost efficiency for working parents, it makes logistical sense to have employees' young children together in one facility. In industrial and corporate parks, firms can band together to create a daycare cooperative, splitting oversight and costs among the companies.
In today's world, there's increasing demand on both men and women to balance work and family responsibilities. Midsized companies that implement practical parental leave policies will keep quality talent in the fold and bring in better hires going forward, all without incurring unreasonable costs.
Historically, how has your company helped employees who have just had children or who need to care for family members? Tell us by commenting below.
Rob Carey is an NCMM contributor and a features writer who has focused on the business-to-business niche since 1992. He spent his first 15 years at Nielsen Business Media, rising from editorial intern to editorial director. Since then, he has been the principal of New York-based Meetings & Hospitality Insight, working with large hospitality brands in addition to various media outlets.