Employers Leave Room for Flexible Thinking on Family Leave, Flexible Work

Organizations are rethinking their approach to family leave and flexible work to find a better balance between workers’ and businesses’ needs, SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, and Chief Data & Insights Officer Alex Alonso, Ph.D., SHRM-SCP, said during SHRM’s recent Benefits Trends Virtual Retreat.

More employers are offering family care benefits that go beyond what federal law requires, as organizations realize that these benefits can improve employee productivity and retention. While the Family and Medical Leave Act of 1993 requires employers to offer 12 weeks of unpaid leave to new parents, Alonso said 40% of organizations now offer some form of paid parental leave, an increase from about 21% before the pandemic.

There’s been a shift in “the calculus that any employer goes through, which is that I’d rather have you be productive while you’re here, and productivity outweighs whatever I might lose from you not being here,” Alonso said. He predicted that the post-pandemic boom in paid parental leave will likely only last until the next recession, saying the benefit will become slightly less common over the next five years until only between 25% and 28% of employers offer it.

Taylor said these benefits, while attractive to employees, present sizable financial costs for businesses. Alonso added that costs associated with paid parental leave can increase labor costs between 4 percent and 6 percent for an employer.

“These aren’t nice-to-dos; this actually hits the company’s bottom line,” Taylor said. “That’s your merit budget for the year.”

But the additional cost may be worth it for companies that are looking to attract and hang onto top talent. “I think the biggest business argument for [expanded family leave] is retention, but more importantly, having a scenario where that person walks on and is your promoter in everything they do,” Alonso said. “Whether they’re still with you or not, they will still promote you as a workplace as a workplace they had a good experience with.”

At the same time, companies may increasingly need to think beyond just parental leave to a more expansive vision of family leave, Taylor said. “We have a significant portion of the population who needs elder care because they’re responsible for taking care of their parents, and increasingly their grandparents, because people are living longer,” he said.

“If I go to my boss and say, ‘My kid’s sick today, I have to leave to take care of my kid,’ no problem. People get that. If I have to go to Florida to check on my mother because she’s not feeling well, people don’t see that the same way,” Taylor continued. But if organizations move toward open-leave policies, they can accommodate a wider range of situations and make all their employees feel their organization supports them with whatever challenges they face.

The need to provide family care can contribute to the demand for flexible work arrangements, but Taylor and Alonso said they’ve seen that trend wane somewhat in the years since the pandemic started. Employers and employees alike are increasingly taking a more nuanced view of remote work that acknowledges both the benefits and the drawbacks of working outside the office. Loneliness is a growing mental health concern, they note, and the casual social connections of a workplace can help alleviate that issue.

Also, Generation Z workers are increasingly likely to want to come into the office at least some of the time, Alonso notes, though they still express a desire for flexibility and choice about what that arrangement looks like. In response to these trends, employers are increasingly rolling back benefits designed to help workers enhance their home offices or use coworking spaces, in favor of a more robust return to the office.

“We’re giving flexibility, but we want you to be flexible about coming back to the office as well,” Alonso explained.