The Bill and Melinda Gates Foundation is cutting its 52-week paid parental leave in half, the Seattle-based firm said recently, citing “unintended consequences” including staffing disruption.
Starting in 2020, the foundation will give employees access to six months of paid parental leave. It also said it is adding a new benefit for new parents: a $20,000 taxable stipend to help with child care costs and other family needs when they return to work.
The foundation’s policy change highlights the challenge many employers face in rolling out paid leave programs. Though a number of companies have been beefing up paid parental leave policies in the last year, the Gates Foundation’s yearlong policy — which went into effect in late 2015 from 16 weeks — was viewed by some industry insiders as an unattainable standard. Others said it would cause too much disruption in the foundation’s operations.
“Workplace challenges are very real when employees are away from their jobs for a full year,” says Julie Stich of the International Foundation of Employee Benefit Plans. While “meeting deadlines and completing work efficiently and effectively when shorthanded can be done in the short term,” she says, it cannot be done for an entire year.
When that occurs, “the stress on colleagues and managers is immense,” Stich says.
Similar challenges were noted by the Gates Foundation.
“Backfill positions had a ripple effect across the organization, in some cases extending two or three layers deep,” Steven Rice, the foundation’s chief human resources officer, said in a LinkedIn post. “While some backfills are hired externally, a large percentage are internal. Once we backfilled the role of an employee going on leave, we often needed to find a backfill for the backfill. On one team, 50% of the staff was either on leave or staffed by those in backfill positions, making the regular work of the foundation far more difficult than expected.”
Though paid leave programs are a trending benefit topic — and a tempting offer for employees in a hot job market — even the more generous policies offered by big-name firms usually fall somewhere in the four- to six-month range. Amazon, American Express and Facebook, for example, offer paid parental leave between 16 to 28 weeks.
The United States is the only developed country in the world with no federally mandated paid family leave, but President Trump is calling for that to change. During his State of the Union address this week, he said he is including a plan for nationwide paid family leave in his budget.
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According to IFEBP research, employers on average offer eight weeks of paid maternity leave and five weeks of paid adoption leave. Only 3% of surveyed employers offer 26 weeks of paid maternity leave, and 1% offer that amount of paid adoption leave.
With many employers recently boosting parental leave programs, it’s unique for a company to significantly cut a program. Though taking away a benefit can cause morale issues, Stich notes, it’s a good idea for employers to rethink offerings, especially when they result in less-than-desirable outcomes.
“It’s critical for employers to review coverage and design decisions to make sure what’s being offered is meeting the goals of why the benefit is being offered in the first place,” she says. “If the new or enhanced benefit isn’t working after an adequate amount of time to see real results, the benefit can and should be changed to better meet the employer’s goals.”
For its part, the Gates Foundation said since increasing the leave policy three years ago, it monitored the program and sought employee feedback.
Rice said “a growing body of evidence” finds that a six-month parental leave policy may be the magic amount of time employers should offer. A six-month policy “delivers on key outcomes like the health and development of children, gender equality and women’s careers,” Rice said. “Experts who have studied the connection between the length of leave and ideal outcomes recommend a similar standard.”
The Gates Foundation noted that employees already on leave or who are expecting before the new program launches (including pregnancy, adoption or surrogacy), will still be eligible for the current 52-week leave program.
“We will continue to evaluate how we can improve our parental leave program and its impacts, including additional support for returning parents and their managers,” Rice said.
