Economy

How Everyone Benefits When New Fathers Take Paid Leave

CREDIT: Shutterstock

Paid maternity leave is mandated in nearly every country but ours: As President Obama noted in the State of the Union when he called for national paid family leave, “We’re the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers.” Paternity leave, on the other hand, is not as widespread: 70 countries guarantee paid leave for fathers after the birth of their children, compared to 182 that ensure maternity leave.

But paid paternity leave comes with a variety of benefits for companies, employees, and their families that can’t be gotten with paid maternity leave alone.

Blue State Digital, a consulting firm that helps campaigns and organizations with online strategy, increased paid leave from two weeks to six minimum for both men and women in 2013, with three weeks tacked on for each year an employee stays at the company, up to 12 weeks total. “We believe it’s the right thing to do, the right way to treat employees,” said Marie Danzig, the company’s head of creative and delivery.

But it’s not just because of values. It’s also a business decision. “We made the change because we did a lot of research into what other companies were doing,” Danzig said. “I expect in the long run, the benefits will absolutely outweigh the short-term costs.”

There will of course be short-term costs to cover employees who are gone longer. But Blue State expects that the long-term benefits of higher retention and productivity as well as the ability attract top talent will more than make up for it.

“Retention is just so important,” she noted. “If you lose someone, you might need to spend more time and energy and money on recruiting someone than you would obviously if you’re able to retain excellent employees.” Paid family leave has become an important way to signal to employees that the company is investing in them. “People feel their company is committed to them in the long term, that their happiness and wellbeing is prioritized over short-term profit. Ultimately I do see this translating into a deeper commitment from employees.” It can also boost their productivity by creating “an environment where you can really bring the best of yourself to work everyday,” she said.

Matt Ipcar, Blue State’s executive creative director and SVP, just came back from a two-month leave for the birth of his second child. “I’ve been here six years, it’s the longest place I’ve ever worked,” he said. Paid leave helped him want to stick around.

“There’s something about sitting with your family in a nice cozy house, not having to go to work, and getting a paycheck to pay for all the things that you need,” he said. “In the back of your mind you’re constantly like, ‘Wow, my company is really great.'”

And in the tech space, where competition for talent is cutthroat, Blue State’s family leave policy helps it stay competitive. Because the agency caters to a less corporate clientele, it may not be able to match the salaries at strictly commercial agencies. “But this is something Blue State Digital can do to make the lives of its employees better,” Danzig noted.

“In the long run, I think this policy is certainly going to be positive not only for employees, but also the company as a whole,” she said.

Businesses may not be as eager to make the leap as Blue State out of worry about the costs of paid family leave. But there’s evidence that the benefits of providing leave can outweigh the costs. Three American states have paid family leave programs, which cover both parents: California, New Jersey, and Rhode Island. California’s was the first, and two economists did detailed surveys of 253 firms in the state. The vast majority of employers said the policy had minimal impact on their business operations. On the other hand, 91 percent said it had a positive or neutral effect on profitability and employee performance and 89 percent said the same of productivity.

A similar story has played out in New Jersey: of 18 surveyed businesses, the vast majority said it hadn’t had any impact on their finances. Twelve said it had a positive impact on their work.

shutterstock_133093346

CREDIT: Shutterstock

Overall, paid family leave helps keep people in the workforce after they have children. When more workers are able to take leave, they’re more likely to choose to remain in the labor market, and paid parental leave is associated with higher employment in economies around the world. This is true on the individual firm level as well. In California, employee retention in lower-skilled jobs increased to 83 percent for those who took leave compared to 74 percent of those who didn’t take it. That saved employers $89 million a year.

It also helps to draw men in to a job. In a survey of 1,000 employed fathers, 90 percent said if they were thinking of having another child and considering a new job, it would be important for a new employer to provide paid leave, with 60 percent who said it’s extremely or very important. Nearly half of fathers feel they don’t get to spend enough time with their children.

Paid paternity leave doesn’t just help fathers, though. It has important benefits for their families and spouses.

A longer leave definitely made a difference for Ipcar’s experience. His first child was born before the more generous leave was put in place, so he took two paid weeks of parental leave plus another three of paid vacation and holiday time. “I remember thinking at the time that getting two weeks paid was pretty amazing, and it was amazing,” he recalled.

But the ability to stay home longer with his daughter changed the experience. “What happens after five weeks at that age, they just start to smile at nine weeks, they’re just starting to become super cute at about the time you have to go back to work,” he said. “It was nice this time to see the earlier stages. I saw them with our first born, but I wasn’t really there all the time.”

Being there for the early months has ripple effects for fathers later into their children’s lives. A dad who takes two or more weeks off after the birth of his child ends up more involved in his child’s direct care nine months later — changing diapers, feeding, bathing — than a father who doesn’t take leave. Men who can take paternity leave also end up being more competent and committed fathers later in their children’s lives.

Paid maternity leave offers new mothers the break they physically need without breaking the bank. But paid paternity leave goes even further. It often changes a family’s gender dynamics and helps mothers stay attached to the workforce. At Blue State, 12 parents have taken leave since the beginning of last year, which has been evenly split between mothers and fathers. “This parental leave policy helps eliminate the stigma around women and men taking time off to be with newborns and family,” Danzig said. She believes it has helped increase “gender equality in the home and in the workplace.”

When men are offered paid leave, they tend to take as much as is made available to them. After California’s paid leave program went into effect, the number of fathers taking leave doubled and they took more time.

That relieves some of the burden of parenting from the mothers’ shoulders. A paper published last month looked at Quebec’s family leave program, which not only offers paid family leave but includes a “daddy quota,” or five weeks of paid leave only they can take. Before it went into effect, household duties split along gender lines, with women doing most of the unpaid work and men doing more paid work in the office. Afterward, fathers who were eligible for the leave increased the time they spent on household duties by 23 percent. Mothers, for their part, were more likely to be employed full time, work longer hours, and even saw an increase of over 25 percent in their incomes.

A study of a similar paid family leave program in Sweden found that a mother’s income rose 7 percent for every month of leave her husband took. A number of other cross-country studies have found that fathers who take leave do more childcare and that the time fathers spend on childcare is higher in countries with generous paternity leave policies.

But some countries have found that to really get men to take leave, a portion has to be set aside just for them, as was done in Quebec and has been implemented in places like Sweden and Iceland.

And there are some drawbacks. Just as women’s earnings suffer from the “motherhood penalty,” research has found that men’s earnings can suffer too when they take time off for family reasons. Men who take family leave are also at a higher risk of getting demoted or disciplined.

The negative stigma may dissipate, however, as more parents of both genders take leave. A study done in Norway found that if one man takes paid family leave at his company, the male coworkers around him become much more likely to take it themselves when their children arrive. The more both parents take leave, the more it becomes normalized.

Ipcar has seen that at Blue State Digital. He found a lot of interest in his leave when he got back to work. “You’re being asked advice from the people who are about to have kinds and you’re exchanging funny stories with the other parents and getting advice from them too,” he said. “It’s been really nice.”