Paid Family Leave is Not As Simple As It Sounds

As states slowly line up to pass their own paid family leave bills, advocates are more vocal about explaining that the U.S. is the only developed country in the world that does not mandate the practice. Proponents of paid family leave present it as such an easy thing. Just keep paying employees while they take time off for family matters and then bring them back when they are ready to work. Sounds simple, doesn’t it?

The reality for employers is a lot different. Indeed, paid family leave is not as simple as it is made out to be. Employers have a lot to consider before implementing such a benefit. Those that ultimately decide paid family leave is worth offering will do so. Those who decide it is not should be allowed the freedom to run their businesses as they see fit.

The Money Question

Money is almost always the first concern that comes up when companies start talking paid family leave. Will the company ultimately spend more or less by implementing a family leave benefit? That depends on how you look at it.

If there is a risk that employees will ultimately quit their jobs and go elsewhere because paid family leave is not offered, a company could actually spend less by implementing a benefit. They would spend less by not having to spend as much on hiring and training new workers to replace those who leave.

On the other hand, if the risks of turnover are relatively low, a company could spend more by having to bring in temporary help. Unfortunately, the one thing that is often forgotten in the paid family leave discussion is that the work done by the individual taking leave still needs to be done. That means paying more for temps or paying other employees overtime to make up the difference. Either way it is an added cost.

The Turnover Question

Looking at the money aspect of paid family leave ultimately leads to whether or not a company will suffer significant turnover without the benefit in play. There are no clear answers to this question. The data just isn’t there in any reliable format.

BenefitMall, a nationally known payroll and benefits administration provider, confirms that companies can spend 3 to 4 times more on recruiting and hiring then they would on retaining employees by offering generous benefits. But recruiting and hiring data paints an incomplete picture. It’s still not clear how likely employees are to quit their jobs because they are not offered paid family leave.

The Recruiting Question

A compelling argument in favor of paid family leave is that it makes recruiting top talent easier. It is an argument that is hard to dismiss when you consider how valuable benefits have become as a recruiting tool. The reality is that when all other things are equal, workers will choose a company with a great benefits package over one with mediocre benefits.

Paid family leave could be the benefit that tips the scales in a particular company’s favor. The benefit not only alleviates some of the worries younger workers have, but it also gives those workers a tangible reason to be more loyal to the employer. Paid family leave makes workers feel more valued. It is as simple as that.

When you strip away the politics of paid family leave and look at what employers have to concern themselves with, it becomes apparent that there is no easy answer. Some companies would actually do better with a paid family leave benefit in place. Others would not. That’s just the way it is.

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