“The government is splurging on turnover costs — by skimping on paid leave benefits that most Fortune 100 companies use to keep their best employees loyal and avoid costly recruitment and retraining,” according to Kevin Miller, one of the authors of a report on parental leave released this week by the Institute for Women’s Policy Research (IWPR).
Most Fortune 100 companies offer paid maternity leave, and a third also offer paid paternity leave, according to the report. The federal government, America’s single largest employer, offers neither. The lack of parental leave benefits costs the government thousands of trained workers every year, according to the new report.
While the House version of the Paid Parental Leave Act for federal employees (HR 626) was passed in July 2009, the Senate has not taken up a similar bill.
IWPR calculates that the federal government could prevent 2,650 departures per year just among female employees by offering paid parental leave, preventing $50 million per year in turnover costs.
Turnover costs include recruiting new employees, the low productivity of new workers, drains on the productivity of colleagues and supervisors, human resources processing, training, and the productivity lost between the departure of one employee and the hiring of a replacement.
“With all the baby boomers reaching retirement, employers have to attract young workers, and young workers want jobs that let them raise a family. That’s one reason that smart employers offer parental leave benefits,” according to report co-author Allison Suppan Helmuth.
Balancing work and family is particularly important to young college graduates entering the workforce. Two-thirds of college students say that balancing work and family is a priority for them, according to the IWPR report, citing data collected by the Partnership for Public Service. Overall, federal employees are less satisfied with their jobs and employers than are employees of private companies. Federal employee satisfaction with work-life benefits averages 43%, compared to 86% satisfaction with vacation and sick time, and younger workers are less satisfied than older workers with the paid leave they receive, according to the report.
“The reason so many of America’s top companies offer paid parental leave is that it keeps workers loyal, and that holds down turnover costs,” according to IWPR President Heidi Hartmann. “It’s not generosity. It’s just good business.”
Hartmann cites the report that new mothers who are able to take leave are more likely than those without leave to return to work within three months of giving birth. Women with paid parental leave are more likely to return to the same employer after the birth of a child. When Aetna increased the length of its maternity leave, retention of new mothers increased from 77% to 91%, according to the report. Workplace flexibility improves workers’ commitment to their employer and work-life balance is a leading concern cited by employees deciding to remain with their employer.
The full report is available from IWPR online at http://iwpr.org/pdf/FEPPLAA141.pdf