…So a few days ago I read a Netflix announcement wherein the Company announced it was providing up to 12 months of paid maternity and paternity leave to employees working in its streaming business.
The decision by Netflix here has launched a great deal of discussion about paid parental leave. 1 Today I’m setting aside the question of if paid leave should be a matter of federal law because – whatever else it may be – this is not a political blog… but having spent some time reading the arguments for more leave, less leave, and expanded leave, I’d like to share a few thoughts on the pros and cons of taking various approaches from an HR perspective.
One of the criticisms leveled against Netflix’s policy here is that it doesn’t cover some (or all) employees in its DVD distribution and customer service groups. The Company is being criticized for what is in essence a two tiered benefits system, but the Company is not alone in this approach. When looking at both sick leave and parental leave in the U.S., low wage earners are much less likely to have a benefit than higher wage earners. The market reasons for this approach are perhaps obvious – companies offer more perks and benefits to attract highly skilled employees the same way they offer more money – but the utilitarian reasons are perhaps less obvious. These are I think best exemplified in a post from Richard Branson discussing his company’s newly announced unlimited PTO policy (originally cited in a Forbes article here):
…founder Richard Branson said in a blog post that he wants his employees to take as much time off as necessary, but he said he assumes “they are only going to do it when they feel a hundred percent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business—or, for that matter, their careers!”
^Companies are more likely to offer high-earning, professional employees lavish (and in some cases even unlimited) perquisites because of their tendency to only utilize them to the extent that they believe they can do so without damaging their careers. Conversely, an employee in a non-professional role with less upward mobility doesn’t have the same incentives to limit their use of PTO benefits with prolonged or unlimited time frames. Highlighting this point, from the same Forbes article cited above:
But an unlimited offering puts a great deal of uncertainty on employees. For workers, taking time off becomes more like taking someone up on a favor rather than accepting a benefit you are entitled to.
In 2011, a Netflix spokesperson estimated that Netflix employees were taking three to five weeks off annually—more than they had in the past, according to The Wall Street Journal. He also said that workers keep in touch via email or phone when they’re out. “People are on all the time,” he said.
^In a high performing culture, even when out on some sort of leave, it’s often a table stakes expectation that salaried professional employees be available remotely… and in cases where this isn’t an expectation (such as paternity/maternity leave) there is nonetheless a tacit expectation that leave doesn’t materially impact business operations. The higher you climb in an organization, the greater the pressure there is to always be on. 2
To this point, when Adobe announced its own new parental leave policy a few days ago it said:
When companies don’t provide a framework for leave, employees tend to look toward the average to determine how much time to take, Morris says. An unlimited policy is also hard on managers, she says, because when one employee takes more time than another, issues of equity or fairness crop up.
^This doesn’t necessarily mean that 26 weeks’ leave is the optimal amount of time off (Netflix’s 52 week policy might end up working wonderfully), but it’s critical that any new leave policy – be it vacation, parental, sick/family leave, or otherwise – carries with it clearly defined cultural expectations around use (particularly if the policy is unlimited).
…Ultimately, as long as paid leave policies remain the domain of the private sector, companies will need to balance the need to be market competitive with the realities of their cultures and operating environments when setting policy. This means that there will sometimes be haves and haves nots on an industry, company, and maybe even departmental level. With that said, as the lines between work and life continue to blur, I do think that paid sick, parental and vacation leaves have got to become table stakes expectations in our society. In the overwhelming majority of companies, there are broad swaths of the population that aren’t eligible for paid leave of any sort – and that’s just not okay.
As always, please share your thoughts in the comments section below.