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Time for Dad

A growing number of employers are offering paid paternal benefits to new dads and are finding the benefits go both ways.

Thursday, February 11, 2016
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Several years ago, after announcing that he and his wife were having a second child, Joel Walker received a visit from HR.

As creative director at Blue Chip Marketing Worldwide, a marketing and advertising agency in Northbrook, Ill., with more than 200 employees, Walker learned that HR had just changed the company's maternity policy. Now, new mothers and fathers would receive six weeks of paid-time-off after the birth or adoption of a child.

With a rather young employee population, the company historically catered to new mothers, offering paid maternity leave and an on-site nursing room, and hosting Mother's Day celebrations every year. So this was a dramatic shift.

Walker took advantage of the new flexibility. After his first child, Milo, was born, he immediately took two weeks off work, using one week of paid vacation and another unpaid week using the Family and Medical Leave Act, which allows new parents up to 12 weeks of unpaid leave during a 12-month period following the birth or adoption of a child. But, following the birth of Rosie, his second child, he used a week of vacation and then waited until his wife returned to work three months later to use his six weeks of paid-time-off.

"It was such a wonderful, cherished, precious experience for me because I was able to create and foster this connection with Rosie at a really young age," Walker says, adding that the new policy also helped him avoid one month of high-priced child-care expenses. "I talked to a couple of other fathers who have taken advantage of this opportunity. They echo similar thoughts and experiences."

Only 12 percent of private-sector employees in the United States have access to paid family leave through their employers, according to the U.S. Department of Labor. Also worth noting is the fact that the United States is the only industrialized country on the planet that doesn't guarantee this benefit to workers. The only other countries not guaranteeing it are Swaziland, Lesotho and Papua New Guinea.

So why are U.S. employers stuck in neutral? Consider the positive impact paid parental leave has on recruitment and retention (especially for young workforces), job satisfaction and employee engagement.

Still, many employers resist, citing high costs. However, the three states offering paid parental leave -- California, New Jersey and Rhode Island -- fund it through employee-paid payroll taxes and administer it through their respective disability programs so there is no direct cost to employers, according to the National Conference of State Legislatures. Although these programs were created decades ago to ensure that workers receive a portion of their wages when taking time off work for a medical problem, they now pay workers part of their wages to care for a family member with a serious health condition or new child. States without disability programs must create paid family and medical leave programs from scratch. So far, paid family leave bills were introduced in more than a dozen states, says the Washington-based National Partnership for Women & Families. Looking ahead, employers may be forced to offer this paid leave to compete for top talent or if paid parental leave becomes state or federal law.

Last fall, U.S. Senators Brian Schatz (D-Hawaii) and Barbara Mikulski (D-Md.) introduced the Federal Employees Paid Parental Leave Act that would provide federal employees with six weeks of paid leave under FMLA for the birth, adoption or fostering of a child.

Likewise, the U.S. Equal Employment Opportunity Commission issued employer guidelines in 2014 stating that parental-leave policies should be equal for men and women. Basically, companies that offer mothers paid time off to bond and care for their newborn -- beyond recovering from childbirth -- must also offer the same benefit to new fathers, the guideline states.

HR professionals are paying attention.

For nearly 30 years, Blue Chip supported a traditional maternity leave policy. Fathers only received what was protected under the FMLA, says Amy Rottman, associate director of staffing at the agency.

She recalls the subject coming up in HR discussions after an employee mentioned that he was going to adopt a child. Since the marketing and advertising industries enjoy a progressive reputation and tend to employ a young workforce, the decision for the policy change seemed obvious.

So far, Rottman says, only three fathers have taken advantage of the paid paternity benefit since it was introduced. She believes the policy is "striking a chord" with young male employees and new workers, who typically make positive comments about its gender-neutral stance.

"We've grown a lot over the years and it's really important for us as a company to maintain this kind of smaller, family-feeling culture," says Rottman. "It sends a very strong message to [our workforce] in general to say that parental leave isn't just a women's issue. It's something that's encouraged across both genders and we should take responsibility for it as a society."

Benefits Outweigh Cost

Many high-tech companies have already adopted such policies. At Facebook, for example, all full-time employees around the world receive four months of paid parental leave. Netflix, which touts a "freedom and responsibility" culture, announced its unlimited paid parental-leave policy last August.

Under the policy, new moms and dads are allowed to take off as much time as needed during the first year after a child's birth or adoption, states Tawni Cranz, Neflix' chief talent officer, on the company's blog. They can return part-time, full-time or go back out as needed. Employees keep receiving a full paycheck instead of disability pay.

Initially, the policy didn't extend to part-timers or hourly employees working in the areas of streaming, DVD or customer service. Since then, the company has reversed its decision. This year, hourly workers can take off 12 to 16 weeks of work at full pay, depending on the area in which they work.

The company's generous policy reflects the continuous need for evolving, work/life balance practices.

"We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances," she wrote. "Experience shows people perform better at work when they're not worrying about home."

Likewise, Hilton Worldwide's new parental policy for U.S. employees went into effect on Jan. 1. All new parents receive two weeks of paid-time-off while birth mothers receive an additional eight weeks of PTO, says Laura Fuentes, senior vice president of total rewards at Hilton's headquarters in McLean, Va. Fathers can also apply the benefit within six months of their child's birth or adoption.

Of the global company's estimated 160,000 employees, approximately 60,000 work in the United States. The former policy provided just birth mothers with six to eight weeks of partial pay.

"We kept hearing from them -- particularly in the United States -- a desire to have more flexibility to take care of personal matters [and] family, [to] really be able to balance their personal and professional lives in the moments that mattered most," Fuentes says, adding that program cost was not a deciding factor. "While we were competitive within our industry and the United States, we felt [our existing policy] wasn't reflective of what we wanted to offer our team members. We decided to offer a benefit that would be consistent regardless of level or role of our team members."

The company's communications and benefits staff crafted an employee email from Hilton's president and CEO -- Christopher J. Nassetta -- announcing the new policy as part of the employee benefits package. Fuentes says the response was "overwhelmingly positive," adding that the policy was promoted on flat-screen TVs throughout each property and by company leaders who were armed with talking points by HR.

Although it's too soon to comment on the policy's usage, Fuentes believes it will help attract and retain top talent, resulting in exceptional guest experiences.

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"It isn't window dressing," Fuentes says. "We're looking to build a great place to work through many of our programs. Whether they're corporate or frontline employees, we want to get the best, we want to keep them and we want them to thrive."

Millennials, Politics and Cost

Every week, Carol Sladek receives calls from clients about paid paternity leave. As a partner and work/life consulting leader at Aon Hewitt, a global HR and management consulting firm in Lincolnshire, Ill., she points to several reasons why employer interest is growing.

She says employers typically keep up with market trends and adopt similar policies or strategies implemented by competitors. This policy is no different.

"It does tend to have a contagious aspect to it," Sladek says. "You see one company putting something in place and, suddenly, a couple more jump on board."

Demographic changes are also causing companies to rethink their strategy. Consider millennials, those born between the early 1980s and early 2000s, who value work/life balance perhaps more than any other generation. According to a recent PwC report that surveyed 8,756 female millennials from 75 countries, The Female Millennial: A New Era of Talent, 19 percent stated they were starting a family and wanted to spend more time at home, compared to 18 percent of male millennials, making this the sixth most likely reason women or men would leave their former employers.

"This is being looked at very seriously by many organizations," Sladek says. "The kind of best-practice trend we're seeing is to pull it all together, lay it all on the table, look at it, figure out what you want to provide for new parents and create one policy for everyone."

As employees push for more job flexibility, Sladek says, employers are being very cautious and strategic regarding paid leave, exploring different possibilities. She suspects that U.S. employers will eventually settle on offering FMLA's 12 weeks of time off as paid leave. By then, she adds, employees may no longer be fearful of taking time off work, afraid that they will be perceived as uncommitted to their job and passed up for company promotions.

The upcoming presidential election will also influence the policy's fate. If a Democrat wins, that will speed up a federal mandate for a national policy. But if a Republican is elected, "we won't have that same push," says Melinda Figeley, vice president of HR Consulting Services at NFP, a national insurance broker and consultant in Austin, Texas.

Meanwhile, Figeley advises clients to write a gender-neutral paid-leave policy. She points to some employers that are already considering offering FMLA's 12 weeks of time off as paid leave, which would make the policy simple to administer.

Financial-service companies, investment bankers, technology employers and start-ups have been on board with paid paternal leave for a while, she says, because it helps attract young talent.

But other employers complain that it adds another fixed cost to their overstretched budget. Figeley says HR's biggest challenge lies in convincing senior leaders to endorse paid parental leave by linking such policies to positive metrics involving employee recruitment, retention and engagement.

She says HR can't construct such policies in a vacuum. It needs to consider numerous administrative details -- such as whether employees should be required to use paid vacation and sick leave before getting parental leave or if, while on leave, they should still pay the same amount of insurance premiums.

Whether it's the anticipated cost or effort needed to gain senior-executive support, she says, many HR professionals are distancing themselves from such policies.

"There will still be a contingent of employers that will resist this because of the cost involved," says Figeley. "Those late adopters may take a while to get on board or wait until they're required under state or federal law to provide that benefit."

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