Over the past few years, we have seen a growing number of organizations in the US and around the world introduce or expand parental leave benefits for new fathers in their workforce, as well as new mothers, in response to increasing demand for paternity leave and greater work-life balance for working parents in general, particularly among millennials who are starting families. Recent court cases both in the US and in the UK have advanced the argument that granting more parental leave to mothers than to fathers (beyond the additional medical leave to which women who have just given birth are entitled) constitutes gender discrimination.
These lawsuits point to the increasing importance of paternity leave in employee perceptions of their total rewards packages. Our research at CEB (now Gartner) shows that employees are sensitive to changes in both maternity and paternity leave. However, increasing paternity leave actually has a slightly greater impact on employee perceptions of rewards than increasing maternity leave, likely because paternity leave is rarer and more variable across companies.
As a forthcoming benchmark report on employee rewards preferences will show, employees globally also tend to get more utility out of lower levels of paternity leave than maternity leave. That is, employees are more sensitive to an additional two weeks of paternity leave than they are to the same additional amount of maternity leave.
Yet this does not mean that maternity leave is not valuable or important!
Rather, it reflects that employees in most countries have come to see maternity leave as an expected benefit, but have fewer expectations about paternity leave because the way it is offered by companies is still evolving. (In the US, where paid maternity leave is not a mandatory entitlement as it is in most countries, employees are more sensitive to changes in leave for mothers.)
As the recent news in this arena suggests, approaching parental leave purely from a lens of optimizing the business value of rewards may no longer be enough. Progressive organizations also view their parental leave policy—and indeed their entire rewards portfolio—in the context of how it delivers equitable conditions for all employees. Employees, candidates, and the public are increasingly judging companies on the basis of how they are addressing gender inequality and other inequities in the workforce. This adds a new layer of complexity for organizations considering changes to their parental leave policies.
CEB Total Rewards Leadership Council members can view our data on parental leave and rewards perceptions here, as well as our latest study on how organizations are effectively addressing pay equity by establishing it as a fundamental component of the rewards function.