Why more companies should extend paid parental leave

January 2017

Post Author

By Fara Palumbo

Fara sitting 2revised small (2)When I think back to the days of bringing home my infants, I remember the challenges a new bundle of joy brought with it. Taking leave from work, recovering, sleepless nights, and spending time thinking how I would make it all work. When I had my children (now in their mid-20’s), I was working at a large New York bank. I could take partially paid time off for only 6 weeks – essentially my disability period! I loved my job, but I wished I had more time to bond with them before returning to the hustle and bustle of juggling work and family life.

My story may sound familiar to many of you. Over the last twenty plus years, a lot has changed. Many companies, large and small, now recognize the importance of work-life flexibility and offer family-friendly policies to support employees. But, we can do better.

New parents working in the United States need more access to paid leave benefits. The US is the only industrialized nation without a statutory right to paid family leave following birth or adoption. Only about 12 percent of Americans are offered any paid parental leave through their employer.

Disappointingly, the numbers in North Carolina follow the national trend. About 1.46 million people in our state’s private companies do not have access to paid leave when they become a new parent – that’s around 11 percent of private-sector workers in NC.

One in eight mothers return to work just two weeks or less after giving birth. And, more than 75 percent of new mothers are back to work in nine weeks or less, despite evidence that shows extending paid leave is beneficial to parents, children and employers.

As the leader of the Human Resources division at Blue Cross and Blue Shield of North Carolina (BCBSNC), I believed that expanding our paid parental leave was the right thing to do – and so did our entire leadership team. Our conviction was underscored by one of our employees, Emily Swartzlander, who submitted a proposal after returning from maternity leave. Of course, we had questions, including: how much would it cost the company, and what mattered to our workforce? Through our research and analysis, we knew that extending paid parental leave to 12 weeks made good business sense, all things considered.

The benefits of extending paid parental leave

Reports show there is a connection between paid leave, employee retention and, most importantly, the health of parents and their children. For those companies who are just starting to explore extending paid parental leave – or who haven’t considered it yet – let me share some of the facts I’ve learned.

For the parent: Longer paid parental leave policies give parents the time to build a stronger connection with their child, provide the care newborns need, and adjust to life with their expanded family.

Mothers have a lower risk of postpartum anxiety and depression when they have access to paid leave. And those who breastfeed have a lower long-term risk for breast cancer and diabetes. By offering more time to bond with their newborns and better family-friendly benefits, you help improve the health and well-being of your working parents. At BCBSNC, we have a time of transition (TOT) program. When new parents return to work, they can enroll their baby full-time at our on-site child care center. The TOT program makes it easy for moms to visit their babies throughout the day to continue breast feeding and make the transition back to work life a little more seamless.

For the baby: One additional month of paid family leave is associated with a 13 percent drop in infant mortality. And, children whose fathers take paternity leave score higher on cognitive tests when they are older. Stronger parental leave policies also help newborn babies experience:

For your company: Taking care of your employees by offering more paid family leave helps your company:

  • Attract and retain top talent. 69 percent of full-time employees believe that receiving paid parental leave is important when looking for a job.
  • Reduce turnover rates, lowering your financial
    • The median cost of replacing an employee is 21 percent of that employee’s salary. Paid leave increases the probability that new moms return to their careers, saving the employer the expense of recruiting and training newcomers.
    • 87 percent of businesses in California, where a statewide paid leave program was recently implemented, incurred no additional costs. 9 percent actually saw cost savings by reducing employee churn.
  • Foster a more engaged, productive and loyal workforce. Reports show that women who have access to paid leave work 2 to 3 hours more per week after returning to work.
  • Save on health care costs. Making an investment in your workforce may result in lowering your employees’ health care costs:
    • $38,000 saved for every baby born full-term instead of pre-term
    • $78,000 saved for every baby born at a normal birthweight
    • $19,000 saved for every woman who delivers vaginally, versus C-section

Taking care of our BCBSNC family

During my tenure at BCBSNC, I’ve been proud of our progressiveness. We’re now one of a few companies in North Carolina to offer 12 weeks of paid leave for expecting mothers, fathers and newly adoptive parents. Our new Parental Benefit policy recognizes that all parents play a part in caring for their expanding families, providing equal time for all new parents.

When I see large, international powerhouses like Ikea and American Express offering more generous family leave policies and benefits, I’m hopeful that other companies will follow suit in the near future.

Investing in your employees and their families, allowing them to bond with their new babies and take care of themselves, lowers health care costs, improves employee retention, and increases productivity. Above all, it’s the right thing to do.

Fara Palumbo is Senior Vice President and Senior Human Resource Officer at Blue Cross Blue Shield of North Carolina.