Having a paid parental leave policy in place shows that your company really values its employees through all stages of life. As a small business or growing company, it’s important that your compassion for your employees is established.
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Investing in your employee’s happiness in the early stages of your business shows that you are serious about your employees’ wellbeing as well as their careers. A great benefit package not only creates happy and loyal employees, but it also attracts new talent to your company.
At Justworks, we asked ourselves what ingredients we needed to compete for talent and retain our existing talent. We recognized that we needed to launch a full-fledged parental leave policy if we wanted to attract and keep strong and diverse talent.
We formalized a policy guaranteeing 12 weeks of fully paid parental leave for all new parents on our team. We offer coverage for varied family configurations; including birth, adoption, or foster care placement of a child. The benefit is available to primary and secondary caregivers, regardless of gender.
A paid parental leave policy will look different for each company, but here are some important things to consider while you figure out how much time is right for your team.
Consider Flexible Schedules
You could allow your employees to take their leave periodically in intervals after birth, or take leave when their partner isn’t taking their own. Having flexibility enables employees to strategically plan out their leave the way they see fit.
Evaluate the Financial Impact
For smaller businesses, it’s critical to consider the cost of a well thought out paid parental leave policy. Luckily there are great resources that can help assist with that. Optimizely has a great Google Excel Sheet of a financial model you can utilize to calculate the cost of paid parental leave.
Remember that retaining exceptional talent is key to a thriving business, so analyzing your finances to see what is possible is a great first step. According to the Center for American Progress, the average cost of replacing an employee is 21% of their salary. With that being said, introducing policies that further boost retention is a big financial gain in the long run.
Get your Employees’ Opinions
Your employees keep the company running, so when it comes to paid parental leave, getting their input is a great way to survey what your employees value. Researching what other companies offer and seeing what your employees like the most could be a good way to customize your own leave for your employee’s needs.
There’s a crowdsourced resource called #RewriteTheRules that allows you to research paid parental policies. It was developed by fellow entrepreneur Heather Whaling, president at Geben Communication, so that smaller companies can gain practical insight and inspire others. Companies upload their policies so that other companies can use it as a reference. You can even tailor your search to the number of employees and the amount of weeks of paid parental leave offered. This a great tool to see what other businesses are doing.
Whether you are at the point where you feel you can offer a paid parental leave or not, it’s a good thing to start thinking about now. When you’re competing for talent against bigger companies, and you’re trying to attract and retain a diverse and talented workforce, you can bet that candidates and current employees will soon start to ask you the answer to the question, “What happens if I have a child?”
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.