Changing Demographics Are Shining a Spotlight on the Benefits of Paid Parental Leave

Happy multiethnic family sitting on sofa laughing together

The benefits of paid parental leave are garnering more attention as workforce demographics skew younger.

The world of work is changing, and not just from COVID-19. Millennials are the largest generation in the U.S. labor force — one of many factors that influence expectations, behaviors and preferences in today's workplaces.

These shifts are of immediate interest. But HR executives should spend less time wondering what caused these changes and more time wondering how they can best meet the needs of these employees. Attracting and recruiting in-demand talent is no longer a simple calculation of compensation. Today's workforce increasingly wants to have access to the benefits of paid parental leave to help support their lives outside of the workplace.

As you consider voluntary benefits packages for recruiting and retaining the next generation of talent, take note of these three reasons why Virginia Neiswender, Senior Counsel at ADP, says the benefits of paid parental leave are more important than ever.

1. Families look different today

The traditional family structure of the 19th century, if it ever existed, does not exist anymore. Increasingly, social norms around marriage, divorce, long-term relationships and sexuality are changing. Organizations that do not face this reality run the risk of preventing a significant portion of the workforce from accessing their much-needed benefits of paid parental leave.

The solution is surprisingly simple: We need to consider the needs and wants of the new culture instead of going along with our expectations of how we've done things in the past. The reality of diversity is that you have to recognize and respect how the world is changing — and constantly ask yourself how you can support those changes.

"Currently, the laws don't recognize someone who doesn't have a familial relationship with an employee, even though that person might be just as important as a parent or a sibling," says Neiswender. "From a compliance perspective, it's tough for employers to turn a blind eye when leave is requested for someone who is not a tax dependent, because these are paid for and taxable benefits."

2. Lack of paternity leave puts women at a disadvantage

It was once considered normal that a new mother would have access to paid maternity leave in order to manage the demands of birth and new motherhood. But research is beginning to show just how detrimental it can be to a woman's career if she must manage this transition alone. This is where the benefits of paid parental leave reveal a potential for a total social impact. By supporting all members of a family, organizations can ensure everyone has equal opportunity to continue to advance their careers.

Let's consider an example of a new hire in the state of California. From the employee's perspective, this is simple: They're going to have a baby, and they need to take time off. But from the employer's perspective, there are a lot of hoops to jump through. If this employee has less than one year of service, they'd need to use California Paid Disability Leave. Once they hit one year of service, they can use the Family Leave Medical Act (FMLA) and California Paid Disability Leave concurrently. It's up to the employer to help the employee access the most generous and most advantageous benefit for the employee.

"Equity within the workplace is increasingly a top priority for both organizations and employees," says Neiswender. "It's the employer's responsibility to ensure they're providing an equitable benefit and that, regardless of someone's gender, demographic information or status, they have the opportunity to take the leave they need."

3. Work-life balance attracts the most skilled and in-demand employees

Part of what makes work today more complex is that it moves faster than ever before. A knowledge worker today can accomplish in a week what it might have taken a skilled worker months to do just a decade ago. But with this accelerated output and advanced capacity for work comes the threat of burnout, which means the most skilled and in-demand employees are increasingly looking for roles that will respect their need for work-life balance with benefits such as paid parental leave.

Studies consistently show that employees are motivated by compensation. But time off work is an important factor for quality of life, too. If COVID-19 or other business factors have made organizations question the affordability of benefits, such as paid family leave, it's worth considering how you can offer other kinds of benefits, such as increased flexibility and continued remote work options.

"From an employer's perspective, it can be difficult to weave together the requirements of some of these leave laws that might run concurrently or consecutively," added Neiswender. "And there's even more complexity when employers are navigating multiple states and jurisdictions. The focus should always come back to what organizations can do to simplify and help employees navigate their options."

The long-lasting benefits of paid parental leave

We have explored the many advantages of voluntary benefits: They can help build company culture, minimize expensive rehiring and retraining costs, and serve our newly remote workforce. But what we haven't yet acknowledged is that voluntary benefits, such as paid parental leave, roll out a welcome mat for a whole new generation of employees — employees who are highly skilled, passionate about your mission and committed to their families and work-life balance.

The benefits of paid parental leave can have a long-lasting impact on your employees and their families, which will in turn nurture a long-lasting relationship with employees that bring their best and most committed selves to their work.

Interested in learning more about voluntary benefits? Launch this on-demand webinar anytime, "Workplace Spotlight: Your Benefits Administration During Challenging Times"