The best parental leave policies have these 3 things in common

It’s no secret that the U.S.’s parental leave policies pale in comparison to those of other developed countries. Although the Family and Medical Leave Act will protect jobs for up to 12 weeks after the birth or adoption of a child, the act does not ensure payment during the time off; it simply ensures that your job will be waiting for you upon your return. The U.S. is the only high-income country in the world that does not have a mandatory paid parental leave policy. As a result, parental leave policies have become a top factor for candidates to consider when deciding which organization to work for.

For companies, employee turnover is a timely and expensive concern. Studies have found that turnover costs employers between six and nine months of the lost employee’s salary. Therefore, it is vital to not only analyze current parental leave policies to reduce attrition, but also to ensure that the policies in place provide support to both the expecting parent and the business to avoid a diminished productivity rate and disrupted workforce culture.

I have researched dozens of businesses and reports, and conducted interviews with employees who have been impacted by parental leave policies. I found that no matter the size or business model of an organization, the most competitive parental leave policies have three things in common.

Flexibility

The most prevalent and appreciated theme for any parental leave policy is that it exemplifies flexibility. In particular, phased back-to-work policies are popular among many new parents because they allow workers to adjust to life post-child while still feeling supported by their employer and making their responsibilities manageable.

For example, Ally Financial, a leading U.S. digital financial services company, offers new parents up to 14 weeks of parental leave, including the flexibility to take 12 weeks off continuously (or break them up). Alternatively, employees can take 10 weeks of full leave, then transition back to work with a 50% reduced schedule for 4 weeks.

Similarly, Xero, a technology company that provides cloud-based accounting software, offers employees returning from parental leave a flexible return-to-work schedule: Employees can choose how they want to work for the first two months (with the support of their “people leader”), which could include reduced days or hours or a work-from-home arrangement. The company also offers up to 10 “keeping in touch” days paid at their usual salary. These are flexible hours during which employees can stay in the loop with their teams but are not expected to work a full day.

Jackie McLafferty, director of public relations at Datafy, reflected on her own experience as a new parent. Noting that her company is “extremely flexible and supportive of working parents,” McLafferty says its policy was a “huge part” of why she accepted a role with the company while five months pregnant. “It’s stunning for me to consider the talent that companies will let get away and/or will never be able to attract because of their unwillingness to accommodate working parents,” McLafferty says, reiterating the importance of implementing supportive parental leave policies to attract new talent.

A covered base salary and variable pay

An obvious concern for many expecting parents is salary, since there is no minimum federal requirement in the U.S. Thus, the most competitive policies include an impressive 100% paid base salary, which typically would fall between three to six months.

The best parental leave policies also have some form of variable pay. It’s important to take into consideration how employees will be reimbursed for bonuses, incentive pay, or commissions while on leave, as this impacts many people’s annual income and can be a large factor in their decision to stay with (or leave) an organization following parental leave.

Some businesses offer only a percentage of workers’ salaries for several weeks following childbirth. For example, public relations firm Carve Communications offers employees 50% of their full salary for no hours worked during the first four months. For months five through eight, 65% of an employee’s full salary is paid for 15 to 20 hours of work per week, for up to one year, when the employee returns to full-time, full-salaried work.

As Jordyn Burnell, communications manager for settlement solutions firm Milestone, said, “Knowing that my employer values me enough to invest in me and my dream of growing my family inherently makes me more motivated to work hard. I think it’s pretty simple—employees (moms or not) who feel valued are intrinsically inspired to deliver the best ROI for their employers.”

A concrete plan in place for soon-to-be parents and teams impacted by leave

Many businesses do not have a standardized action plan for the time leading up to and following parental leave. According to Allison Whalen, founder and CEO of Parentaly, a company that specializes in parental leave programs, “Most companies are very focused on the return to work; what they don’t understand is that it’s more important to get coverage planning right.”

According to Whalen, important initiatives to consider when preparing for parental leave include coaching programs to train other employees and managers on what (and what not) to say, best practices for when the employee is out of office, and more. Additionally, it’s important to take into consideration adjusted performance reviews based on time off. And, as 91% of new mothers struggle with their return to work, having an effective onboarding plan for the return is vital.

The most competitive family-related policies also include benefits such as fertility treatments, low minimum tenure requirements for leave eligibility, policies for both primary and secondary caregivers, and more.

All in all, strong parental leave policies help employees feel supported and heard. And many people want to work at organizations where being a parent isn’t just tolerated but encouraged.