Providing paid time off to new parents saves businesses money by reducing hiring costs and boosting employee retention, said panelists at an Oregon Business breakfast meeting today on how employers are redefining their approach to parental leave.
Pat Harrington, managing principal at Bora, a Portland-based architecture firm, said the cost of paid parental leave is much less than the costs of recruiting new staff to replace employees that have dropped out of the workforce because they are new parents. “I am amazed at the business case” of offering paid family leave, said Harrington. “It is very cost effective.”
Bora offers employees 60% of their salary for the first six weeks of family leave. Employees can use PTO to make up for the rest of the time they take off to look after a family member. By comparison, the cost of recruiting a new employee is at least one times the cost of an average employee’s salary, he said.
OB Photo: Katy Sword
Another small company that found a strong business case for offering paid parental leave is Salt & Straw. The ice cream store offers three months of paid family leave to employees who have worked at the company for at least one year. Casey Milligan, director of operations, said the policy attracts talented people to work for the company. “We are doing it to have a strong community around our shops and strong teams. We want to be around a long time and want teams to grow with us,” said Milligan.
The U.S. is the only country in the world that does not offer nationally mandated parental leave. But this may soon change as more businesses either offer or expand their paid parental leave policies. Facebook and Netflix are two big names in business that recently expanded their family leave policies. And in April this year, San Francisco became the first city in the U.S. to require employers to offer six weeks of fully paid leave for new parents.
Oregon will be the next state legislature to pass paid family leave, said Amy Beacom, founder and CEO of the Center for Parental Leave Leadership, an executive leadership development and coaching firm. “Small business should have their voice heard. You should get involved legislatively because it is coming down the pike,” said Beacom.
In the U.S., a cultural shift still needs to take place that bridges the divide between workers and their families, says Glaucia Marlin-Porath, owner of Women’s Plaza, a co-working space that allows parents to work under the same roof as their children’s day care. Porath came up with the idea of creating a co-working space after learning that employers that have onsite day care, such as Nike, have long waiting lists. Her business model offers employers a less expensive way of offering parents a place to work with onsite day care. “It is creating an opportunity for employers to retain employees,” she said.
Porath has encountered problems finding a place for her business because of what she sees as a cultural aversion to having children around. She has searched for a year and half for a space to house her business that allows her to have children on site. “I have found spaces that are appropriate; but the challenge is to have children in the building. People have a hard time understanding the concept.”
OB Photo: Katy Sword
Despite the obstacles Beacom sees an opportunity for the U.S. to become a leader in paid parental leave. She said that in many countries where employers have to provide paid parental leave they do the bare minimum to comply with the law. In the U.S. businesses are offering it voluntarily. The building blocks for providing paid leave are already in place; it just takes political will to make a requirement. “I have had the realization we are positioned in the U.S. and in Oregon to be a leader on paid leave,” says Beacom.