5 Things Every HR Professional Should Know About Paid Parental Leave

In the U.S., paid parental leave is an employee benefit that grants parents a leave of absence from employment in response to a qualifying event, such as childbirth or adoption. During this leave, employers continue to pay the parent’s regular income or a portion of that income. Though paid parental leave is not a federal policy, certain states have passed legislation that requires employers to offer varying levels of coverage to eligible employees.¹ As of June 2021, the U.S. is the only industrialized nation that does not mandate paid parental leave. ² Considered a hot-button topic in the political sphere, paid parental leave and its policies are also an important part of human resource management.

As an HR manager or other professional in the field, it’s essential that you understand the ins and outs of paid parental leave as it currently stands and as it continues to evolve over time. Here are five things to know about paid parental leave:

1. Paid parental leave is linked to increased retention rates.
According to a study conducted for the March of Dimes Center for Social Science Research, states that have implemented paid family leave policies have realized a 20% reduction in the number of women leaving jobs during the year after having a baby and up to a 50% reduction after five years. ³ And when employees are happy and productive—and want to stay with a company—money is saved. That’s because the hiring process is costly, including recruiting, hiring, and training new employees. In this way, a paid parental leave policy is a cost-effective tool for HR managers and companies, and one that is likely to improve employee morale and promote loyalty.

2. Workers are more drawn to companies that offer paid parental leave.
Not only does paid parental leave impact talent retention, but it also impacts talent acquisition. In a 2016 Deloitte survey, 77% of workers indicated that a paid family leave policy could sway their choice of employer. ⁴ As a result, more and more companies are implementing paid parental leave policies to attract and keep the right talent. This then creates more competition amongst employers, which in turn encourages stronger paid parental leave benefits so that companies can differentiate their offerings and enable HR managers to recruit the top candidates.

3. Offering paid parental leave often demonstrates an employer’s support of work-life balance.
Millennials and Gen Z seek a healthy work-life balance. When a company offers an array of employee benefits—such as paid parental leave—it demonstrates its support of and commitment to this value. In turn, companies that support work-life balance will be sought after for employment opportunities, be recommended to others, and garner a more positive reputation among working professionals. By 2030, Millennials and Gen Z will make up more than 58% of the workforce, which means it’s more important than ever for HR managers to pay attention to changing workplace trends and preferences. ⁵

4. Employees who are not parents can feel discriminated against.
Paid parental leave is extended to employees who are just that—parents and/or guardians. Consequently, non-parent employees can feel penalized and discriminated against for not having children. When discrimination is felt in the workplace, employee productivity goes down, as does morale. However, in order to counter this potentially harmful experience for workers, some companies have started to extend leave of absence policies to cover a variety of caregivers, such as those with elder or spousal care responsibilities.

5. Employers may incur costs or other negative implications during paid paternal leave.
HR managers will typically be instructed to hire a temp in order to manage the workload of an employee who is out on paid parental leave. Often, this can cost just as much as an employee’s salary—sometimes more. To avoid incurring this additional cost, employers may decide against hiring outside help and instead redistribute the work to internal employees. Naturally, there can be negative implications to this. Adding onto the workload of employees—especially without adequate compensation—can lead to increased stress and decreased motivation, and both can negatively impact productivity.

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¹Source: www.ncsl.org/research/labor-and-employment/state-family-and-medical-leave-laws.aspx
²Source: www.pewresearch.org/fact-tank/2019/12/16/u-s-lacks-mandated-paid-parental-leave
³Source: www.shrm.org/resourcesandtools/hr-topics/benefits/pages/paid-family-leave-helps-women-stay-in-the-workforce.aspx
⁴Source: www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-about-deloitte-paternal-leave-survey.pdf
⁵Source: www.cnbc.com/2019/03/05/how-millennials-and-gen-z-are-reshaping-the-future-of-the-workforce.html
⁶Course content reflects the SHRM Body of Competency and Knowledge. This course of study will in no way guarantee or assure success on the SHRM-CP^® or SHRM-SCP^® exam. Students must use the most recent edition of the SHRM^® educational products for this course and may not use outdated materials.

Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.