Adoption's Multiple Benefits

Helping employees with adoption expenses can bolster their loyalty and productivity as well as speak volumes about the companys work/life commitment.

By Susan Ladika Oct 1, 2005
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HR Magazine, October 2005

Six-year-old Charlie is the light of Jane Aycock’s life. Mother and son garden together, cook together and have duels with their Star Wars light sabers.

But creating their family would not have been possible, says Aycock, without her employer’s adoption assistance. “I don’t think I would have been able to adopt. I could never have afforded it.”

Aycock, who now coordinates community relations programs in worldwide marketing for SAS Institute Inc., a software company in Cary, N.C., was in HR in 1998 when she was asked to look into what it would take for SAS to set up an adoption benefits program. She was 31 and single, and adopting a child was the furthest thing from her mind, she says. But as she did the research, “personally, it spoke to me,” she says. Adopting a child “was something I needed to do.”

What’s more, when she discovered it’s difficult to find homes for biracial children, Aycock decided she wanted “a child who’s hard to place.”

A year later, she brought newborn Charlie home from the hospital. SAS gave her four weeks of paid leave and $5,000 to help reimburse her adoption costs. She ended up spending $1,550 out of pocket.

Employers Get in the Process

Each year, Americans adopt about 130,000 children—about 58,000 coming from foster care, 53,000 through private adoptions or stepparent adoptions, and 19,000 from overseas. While adopting a child from foster care may cost about $2,500, domestic private adoptions can run up to $25,000, and international adoptions can cost up to $40,000.

Although adoption assistance such as that offered by SAS is the exception rather than the rule among U.S. companies, some HR practitioners and work/life experts think it should be the other way around—because it’s a more affordable and valuable benefit than it may seem.

About 20 percent of companies provide adoption benefits, up from 18 percent last year, according to the 386 HR professionals who responded to the 2005 Benefits Survey conducted by the Society for Human Resource Management. Among large companies—those with 500 or more employees—35 percent said they offer such assistance.

Similarly, in a survey this year of 1,000 large organizations by Hewitt Associates, an HR consulting firm in Lincolnshire, Ill., nearly 40 percent of respondents said they offer adoption benefits, up from 30 percent five years ago. The typical reimbursement ranges from $3,000 to $5,000, and paid leave—which varies from one to 20 weeks among the organizations surveyed—averages three weeks. Carol Sladek, a work/life consultant with Hewitt Associates, attributes the gradual increase in companies offering adoption benefits to their “rounding out” their work/life programs. “This is a nice way to provide equity” with maternity benefits, she says.

Offering the same benefits for birth and adoptive parents is “a matter of fairness,” says Adam Pertman, executive director of the New York-based Evan B. Donaldson Adoption Institute, which focuses on adoption education and research. While Pertman says adoption policies should be “resolved differently by different companies based on needs and desires,” he questions some employer practices. He asks why, for example, some companies provide more time off for a woman who has just given birth to a healthy baby than for a woman who brings home a 4-year-old child with special needs from foster care. “The adjustment period is at least as long,” he says. “The bonding period is at least as long.”

Another advocate of parity between adoption and maternity benefits, particularly among Fortune 500 companies, was Wendy’s restaurant founder Dave Thomas. Thomas, who was adopted as an infant and died in 2002, started the Dave Thomas Foundation for Adoption in Dublin, Ohio, in 1992. One if its major initiatives is the Adoption-Friendly Workplace program, aimed at increasing the number of companies offering adoption benefits.

Costs and Benefits

One reason employers may be reluctant to offer adoption benefits is because when companies are looking to cut costs, they often look at HR benefits, says Rita Soronen, executive director of the Dave Thomas Foundation. But Soronen says adoption benefits actually represent a low-cost option for employers because less than 1 percent of employees at companies that offer them make use of them. Yet, she says, they offer returns for those who adopt as well as those who don’t.

Earline Foster, an HR staff consultant with the Salt River Project, an electricity and water utility based in Phoenix, agrees: “It’s not a major expense as a rule, but it’s a great benefit for the people who are adopting and perceived very favorably by the people who are not adopting.”

Laura Wallace, manager of SAS’s work/life and employee assistance programs, says it’s a benefit that “is not very expensive but is hugely valued.” Employees who make use of SAS’s adoption program are effusive in their gratitude, she says, and develop a deeper loyalty to the company. “We couldn’t buy that,” she adds.

At Timberland, a footwear and apparel company based in Stratham, N.H.—and a pioneer in employer-sponsored adoption benefits—those who have used the adoption program “feel good about the company,” says Jacalyn Mitchell, senior work/life manager. “I think we’ve seen production and loyalty increase.”

Furthermore, an adoption benefit can also give an employer an edge in a tight labor market, says Foster. “We were looking for ways we could attract and retain good employees,” she explains. Salt River reimburses up to $4,000 in costs such as legal and other fees, pre-placement home studies and transportation within the United States, and up to $6,000 if the employee is adopting a child with special needs.

Learning from Others

Companies wondering how such programs work can tap informative sources—from consultants to web sites—to draw from the program details and experiences of organizations that have been leading the way.

Sladek of Hewitt Associates suggests that companies make their decisions on adoption benefits according to company size, industry and the type of work/life programs already in place. If the company has child care programs, or paternal or maternal leave, she suggests “matching other programs. Make sure it’s in sync with overall work/life policies.”

Timberland’s Mitchell recommends that companies review their demographics to try to determine what the utilization rate might be. She also suggests looking at the leave provided for employees who give birth, as well as benchmarking against other corporations’ practices. One approach, she suggests, is for an HR manager to contact counterparts at companies that have been recognized for their adoption benefits by Working Mother magazine or other publications.

When Timberland began looking into adoption benefits back in 1994, “there wasn’t a lot to go on, relative to what other companies were doing,” says Mitchell. Jeff Swartz—then chief operating officer, now CEO—asked HR for suggestions on setting up such a program after he received a letter on the subject from an employee. Mitchell compared the costs of adoption with the benefits given to birth parents. She outlined legal fees, adoption agency fees, travel and loss of salary while on leave.

The adoption program that Timberland introduced in 1995 was shaped to match the company’s support for childbirth, Mitchell says. An adopting employee was reimbursed up to $4,000 or up to $6,000, depending on the employee’s income. The maximums were $6,000 to $8,000 for a child with special needs. Employees also received two weeks of paid time off.

The income consideration was eliminated when the policy was revised three years later, and reimbursements have risen to $10,000 for a regular adoption and $12,000 for a child with special needs. Now there’s a proposal on the table to extend the paid time off, Mitchell says.

Occasionally, benefits decisions are made on a case-by-case basis. While some companies don’t offer reimbursements when an employee adopts a relative or a stepchild, Timberland doesn’t have such exclusions and handles these cases individually. In one instance, the company provided benefits to an employee whose husband had a relative who needed parents. In another case, an employee was all set to adopt a baby when the birth mother abruptly changed her mind. Timberland still reimbursed the employee’s expenses.

Over the past 10 years, Timberland employees have adopted 16 children—seven in the United States, nine from other countries.

Easing the Transition

Some companies offer benefits that help employees manage their work and personal lives even after their newly adopted child comes home. Investment banking and financial services firm JPMorgan Chase & Co., headquartered in New York, continues to provide adoption benefits after the employee returns to work, notes Christine Fossaceca, global work/life solutions manager. For example, the returning employee can use the company’s backup child care center—usually available only in special circumstances, as when an employee’s regular child care provider is unavailable—for up to eight weeks to help ease the transition back to the workplace. The first four weeks are free; the remaining four weeks require a co-pay.

JPMorgan Chase also offers up to 12 weeks of paid time off and reimburses employees up to $10,000 per adoption for qualified expenses, including the medical costs of the birth mother. “The money is wonderful and helps so much,” Fossaceca says, “but the time off is incredible in terms of bonding.”

SAS offers extras that include a listserv for adoptive parents, seminars on adoption, a buddy program for those looking to adopt from the same country, a mentoring program that teams up an adoptive parent with someone looking to adopt, and a library filled with resources about adoption. Seminars are also available online for those who work in outlying SAS offices.

Laura Sarisky, SAS’s parent resource coordinator, says notebooks filled with articles also circulate among would-be adoptive parents, describing every phase of the adoption process. Adoption is “a nonintuitive process that is very intrusive in your life,” she says, and various departments within the company work with adoptive parents, providing information and help on matters such as benefits, health coverage, day care, and even travel for an international adoption, she says. Once adoptive parents bring their children home, their families are eligible to use the company’s employee assistance program. Sometimes SAS’s in-house experts help with issues that crop up. Other times, the families are referred to community resources, Sarisky says.

SAS has found that providing as much information as possible also bolsters productivity since many tasks connected to the adoption process must be handled during business hours. Having resources readily available “short-cuts an arduous process,” Wallace says.

When SAS began considering an adoption program, Wallace brought in outside experts, as well as employees who had adopted, and held a panel discussion, which more than 75 people attended. “That demonstrated the need right then and there,” she says. About 10 of SAS’s 5,200 employees adopt each year.

Making a Difference

Overall, adoption benefits add up to “a low-pain way for companies to really help make a difference in society,” says adoptive parent Greg Icenhower, who writes speeches for A.G. Lafley, chairman, president and CEO of Cincinnati-based Procter & Gamble (P&G).

Icenhower and his wife, Dianna, adopted Annie Liang from China in January 2004. They received a $5,000 lump-sum payment to help defray expenses after they submitted receipts, and the company’s health care coverage for Annie “became effective the moment we got her in China,” he says.

Icenhower also was able to take 20 months of vacation and unpaid leave. The Icenhowers traveled with other families to China to pick up their children, and the other fathers were surprised he was able to take time off, he says. “Either it wasn’t an option for them, or they felt like they couldn’t take it.” Although there was no one to fill in for Icenhower while he was gone, he says, he felt “no pressure at all to be half-engaged while I was out.”

Icenhower, who has been with P&G almost 15 years, says he has no plans to leave. But if he were thinking of going to another company, he continues, he would take into consideration whether it offers adoption benefits because of “what it says about a company.”

Susan Ladika, a journalist for more than 20 years in both the United States and Europe, is based in Tampa, Fla. Her freelance work has appeared in publications such as The Wall Street Journal-Europe and The Economist .

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