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Paid parental leaves - the key to talent retention

​Netflix, the American provider of on-demand Internet streaming media, has announced this week that their employees who become parents can now take up to one year of full-paid paternal leave.

Coincidence or not, Microsoft announced yesterday that the company is planning to change its parental leave policies starting on 1st November this year. The tech giant said that new mums will be able to take 20 weeks of fully paid leave and fathers can take 12 weeks. They have the option to take the leave all at once or space it into two periods. Until now, Microsoft used to offer four weeks paid and eight weeks unpaid paternal leave for new parents in addition to maternity disability.

Similarly, Virgin has introduced a year’s full pay for employees taking maternity, paternity or adoption leave for employees who have been with the company for more than four years. Twitter offers 20 weeks of paid maternity leave and 10 weeks of paid paternity leave, Facebook’s policy includes four months of paid leave for new mums and new dads, Google offers biological mothers up to 22 months of paid leave, Apple gives 18 months and Yahoo! Inc. allows new mums 16 weeks of paid leave.

But many other companies around the world fear the high costs they might have to face if they decide to offer full paid parental leave. For example, most companies in the US don’t have such policies in place and, therefore, are at high risk of employee turnover.

Recent studies show that the costs of employee search, selection and training can be massively reduced by adopting enhanced parental leave policies. Moreover, new mothers who take paid leave are more likely than mothers who do not take any leave to be working again 9 to 12 months after they have a baby and they are also more likely to return to the same employer.

In the U.K., paid maternity leave can extend to six months. Statutory maternity pay entitles mothers to 90% of their average weekly earnings before tax for the first six weeks of leave, then £139.58 each week for the next 33 weeks, enabling mothers to spend as much time as possible at home with their children without having financial stress. Often, companies decide to supplement the statutory pay to improve employee morale, attract and retain talent, show their commitment to the health and wellness of their employees and to foster a workplace culture that gives equal opportunities for everyone.

Becoming a parent is definitely a life changing event which can become more challenging than it should be if parents have to take unpaid parental leave. Baby boomers are now close to reaching the retirement age, so all companies who want to be and stay successful will have to take measures to align their current parental leave policies with the 21st Century’s modern family requirements and needs.

How does your company handle parental leave? We would love to hear your thoughts.