Why comprehensive paid leave is a business imperative

For many employees, taking a paid leave of absence is not a choice but a necessity. However, most company leave policies focus solely on short-term parental leave, overlooking the broad range of caregiving responsibilities that impact employees throughout their careers. Without inclusive leave policies, it can be more cost-effective for employees to leave the workforce altogether than actually hire care. 

This presents HR and benefit professionals, as well as business leaders, with an opportunity and an incentive to rethink paid leave in a way that reflects the realities of today's workforce. 

Many company policies were designed for an era when maternity leave was the primary concern, but today's employees face a much broader set of caregiving responsibilities. Eldercare, for example, is an increasingly common strain on employees, particularly millennials as the largest segment of today's workforce. Deemed the "sandwich generation," they are now primary caregivers for aging parents and also raising children of their own, while juggling careers. It's worth noting that women tend to bear the brunt of caregiving, stepping in not just for their own families but in-laws as well. 

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At the same time, men who take on caregiving responsibilities also suffer when leave policies fall short, facing workplace stigma and challenges balancing work and family. Women's medical needs are also frequently overlooked – from pregnancy loss and fertility treatments to postpartum recovery and menopause-related health issues. Without comprehensive leave policies, employees face impossible choices and businesses risk losing valuable talent.

There's a common misconception that expanding paid leave is too expensive, often reducing it to a social issue rather than a business necessity. In reality, failing to support employees through major life events can have a direct and measurable impact on an organization's retention, engagement and productivity. 

Replacing a skilled employee costs anywhere from 40% to 200% of their salary, and employees who feel unsupported are far more likely to leave, either temporarily or permanently. Beyond turnover costs, companies that don't invest in leave policies risk low morale and a workforce that is stretched thin balancing work and personal obligations.

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A modern-day policy

Forward-thinking organizations recognize that paid leave extends beyond new mothers. A strong policy should include parental leave beyond the standard 12 weeks. Many infants are not daycare-ready by then. Research suggests six months is ideal, and countries like Canada have extended parental leave to 18 months. Caregiving leave and support for life events or medical issues also should be included.

SAFE leave, which allows employees to use sick days in the event of domestic violence, costs companies virtually nothing to offer, and most employees will never need it. The same is true for neonatal intensive care unit leave, which allows parents to stay with their newborns during extended hospital stays. Offering these types of leave sends a powerful message of support to employees and prospective hires, strengthening retention rates and reinforcing company values.

Childcare is another critical factor. A lack of affordable, reliable childcare is one of the top reasons parents, particularly mothers, leave the workforce. Subsidized childcare or flexible return-to-work programs can help employees bridge this gap. Organizations that recognize all facets of leave as a workforce-wide necessity, rather than a niche benefit, will be the ones that attract and retain top talent.

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This is a critical opportunity for employers and their advisers to drive real change. It starts with collecting internal data and answering critical questions such as, how are your current policies impacting retention and engagement? Even small adjustments, like more flexible sick time or expanded caregiving leave, can make a significant difference without requiring massive budget overhauls. Positioning paid leave as a business strategy rather than just compliance or a DEI initiative also can help with executive buy-in. 

In the coming years, state-mandated paid leave programs will continue expanding, and companies that fail to adapt will scramble to stay afloat. The future of work demands more comprehensive and inclusive leave policies – not just to support employees but also ensure long-term workforce stability. Companies that invest in these policies aren't just making a moral decision but a strategic one. 

In other words, you can do it because it's good for the world, but you don't have to – you can do it because it's good for business.