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The Talent Wars: Netflix ups the ante with 1-year paid parental leave

August 14, 2015

By Kristin Cifolelli, courtesy of SBAM Approved Partner ASE

Last week, Netflix announced a bold expansion of its parental leave policy. New parents may take up to one year of time off with full pay for the birth or adoption of a child.  The leave time is flexible, allowing employees to leave and come back to work part-time or full-time and then take leave again during the first year following their child’s birth or adoption. 

Netflix is not new to progressive time off policies.  The company already offers unlimited vacation and sick time.  Its approach to employee time off is all about competing for and holding onto the best people, says Netflix’s Chief Talent Officer, Tawni Cranz. “Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field.  Experience shows people perform better at work when they’re not worrying about home,” she told USA Today.

According to a 2013 Pew Research Center report of 38 developed countries, the U.S. ranks last in government support for both paid and unpaid protected leave. The U.S. is the only one that does not mandate any paid leave for new mothers. The median amount of full-paid time off available to a mom for the birth of a child in the other 37 countries is roughly 5-6 months.

While policies like Netflix’s are not the norm, other large U.S. companies have gotten smarter about using parental leave policies to stand out from their competitors in the talent wars.  Some of those companies include:

  • Ernst & Young – 14 weeks paid maternity leave and 6 weeks paid paternity leave.
  • Microsoft – One day after Netflix rolled out changes to their parental leave policy, Microsoft updated its own parental leave policy. Microsoft will offer employees 12 weeks of paid maternity and paternity leave. Birth mothers can also earn an additional eight weeks of “maternity disability leave” with full pay and use short-term disability leave up to two weeks prior to their scheduled due date.  
  • Google – 18 weeks of paid maternity leave and 12 weeks of paid bonding time to all primary caregivers regardless of gender. Google also offers up to seven weeks of paid leave to caregivers other than parents who play a key role in raising a baby.
  • Bank of America – 12 weeks of paid maternity, paternity, and adoptive parent leave.  Additionally, up to 14 additional weeks of unpaid time off.
  • State Street – Up to 12 weeks paid leave to mothers and up to four weeks paid leave for fathers.  Additionally, eight weeks of paid leave for adoptive parents and grants up to $5,000 per family to assist with adoption expenses.

Even the U.S. government has liberalized its policies. In January of this year, it took steps to expand parental leave for federal employees now allowing six weeks paid sick leave to use to care for a new child, take care of adoption proceedings or for the placement of a foster child in their home. The U.S. Navy, in its effort retain more women in its ranks, will double paid maternity leave to 12 weeks and offer longer child care hours.

What are the norms for employers of all sizes in Michigan? According to ASE’s most recent survey data:

  • One of three (32%) unionized organizations and one of five (20%) non-union organizations offer family leave other than FMLA. 
  • One on five (21%) unionized organizations and one of four (23%) non-union organizations offer paternity leave separate from FMLA.
  • The average number of weeks allowed for family or personal medical leaves beyond FMLA requirements ranges from 13 weeks for unionized employers and almost 17 weeks for non-union employers.

Experts caution other employers against jumping into a Netflix-style policy without the proper supports. For one thing, the logistics are challenging. Netflix’s approach to covering for extended absences would seem almost naïve; according to Ms. Cranz, Netflix employees will simply “. . . “figure out what’s best for them and their family, and then (work) with their managers for coverage during their absences.”

But Netflix has been working for a long time to establish a culture of individual responsibility on time-off matters. Its leaders have sent employees the proper signals of their support for the approach by taking long vacations themselves. Employers who take the more traditional approach of maintaining banks of days for this, that or the other purpose will have to set up and manage the same kind of bank for paid parental leave. The logistics of such a policy and covering such lengthy absences may be daunting. Then, like Netflix, they will need to begin to send the proper cultural signals that will make employees feel comfortable  using the leave without fear of damaging their future careers. Getting to that point may take a lot of time.

Without question, however, Netflix’s bold new policy on paid parental leave has upped the ante in the competition for talent.

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