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For Corey Berkey, the vice president of human resources at recruiting software company JazzHR, the need for a parental leave policy hit fast and hard.

“Out of our 80 person company, we had 10 new parents in one year,” he said. “That made us realize that it was time to create a formal policy to ensure we supported and retained our employees.”

For small and medium sized businesses, a comprehensive benefits package that includes a parental leave program can help them compete for top talent. It’s also just good for business: Studies show that paid leave benefits often save employers money by reducing turnover costs.

How to keep your business running and still offer comprehensive parental leave

1. Familiarize yourself with the Family and Medical Leave Act

Before you set out to create a plan based on what you want to offer, review any federal and state policies that apply to your company. For example, the federal Family Medical Leave Act (FMLA) requires that employers with 50 or more employees provide 12 weeks off unpaid leave for the birth of a child or placement for adoption or foster care.

After reviewing the federal requirements, you’ll also want to make sure you understand any state-specific requirements that may apply to you. For example, all employers in Massachusetts must comply with the state’s Paid Family and Medical Leave Act (PFML), which offers paid leave to workers, even with fewer than 50 employees on staff.

2. Research what competitors offer

Because parental leave policies can help your company be competitive when it comes to hiring and keeping the best talent on your team, you don’t want to lose out to superior plans offered by your competitors.

That’s why Berkey made competitor analysis a priority when developing JazzHR’s parental leave program in 2017.

“We started looking at what companies similar to us were offering their employees and used that as a benchmark,” he said. “That gave us a starting point and then we could start making adjustments as we calculated the impact.”

Some things to consider: How long are your competitor’s policies? Do they cover the secondary caregiver as well as the primary caregiver? Are they fully paid? This kind of insight can help you develop a policy that is on par, or better, with others in your area.

3. Crunch the numbers

What you want to provide employees with and what your company can afford to provide may not be the same. Once you have an idea of what you want to offer, it’s a good idea to start estimating what your budget will allow and getting creative with existing policies.

Berkey knew he wanted to offer a 12-week, fully paid policy for new moms. To do that, he turned to an existing disability policy that covered partial pay for employees for six weeks. With that program helping to cushion the cost, JazzHR was able to offer the comprehensive maternity policy it strived for. 

Unfortunately, paying for leave may not be your company’s only cost. Dan Bailey, president of WikiLawn Lawn Care, found that out the hard way when he created his company’s first parental leave policy. Though he hadn’t originally budgeted for it, he realized he needed to be able to hire temporary workers or pay their current employees overtime to pick up extra work. Regardless of whether or not you’ll need outside help to cover those costs, it’s crucial to make them part of your budget and planning process.

4. Review and reassess regularly

Once you have your policy in place, verify that it’s working like you intended. For example, after the plan was put in place at JazzHR, Berkey was alerted to an issue with how the policy was written. To avoid employees stretching out their leave indefinitely, the JazzHR policy included a requirement that the leave be used all at once, continuously.

That created a problem when one employee, who was the only person performing a critical function at the company, was going to take leave. The employee wanted to have the flexibility to still do their job while taking time off in phases. “We realized we needed to amend the policy to allow for a phased return.”

However, with the right amount of tweaking, Berkey was able to create a policy that everyone could get behind.

“Our CEO is the champion of this policy,” he said. “That executive-level buy-in is really important because it lets managers and employees know that this is an important benefit and one that we want to make sure people use.”

About the Author(s)

 Ting  Pen

Ting Pen is a ValuePenguin Co-Founder. She previously evaluated corporate mergers and acquisitions as a Financial Analyst at Citigroup. Her experience in financial services combined with her entrepreneurial spirit allowed for her to start her own fin-tech company. Her passions lie in problem solving, growth, and travel.

Co-Founder, ValuePenguin.com
Parents with baby