Paid time off is incredibly important to employees’ overall wellbeing. When asked what benefits employees value most in a recent Aon survey, more than half named paid time off.1 In fact, one of the best things employers can do is provide their workforce with a comprehensive paid leave program that provides ample time for self-care, family care and recharge, so they can be fully present during the work day.
While specific needs vary from person to person, the overall value of paid time off remains consistent. To continue progress in this space, new state and municipal laws are being made to closely mirror employees’ requests and better support them in cases where work must be balanced with personal caregiving responsibilities. Employers are therefore tasked with deciding if they want their paid sick leave and family programs to simply meet minimum compliance requirements, or if they should establish a new minimum standard for paid sick time and family leave that truly addresses workforce needs.
Creating an Equitable Paid Leave Strategy
An optimal paid sick and family leave policy is one that balances several key considerations. It should comply with relevant laws, while reflecting the employer’s commitment to equitable treatment of their employees. A well-considered plan will also help an employer attract and retain talent. To achieve this, employers should base their principles on equity rather than geography.
Here are three ways to create a compliant program that leverages paid leave laws and guarantees equitable access to family care leave:
1. Understand the demographic makeup of the workforce: Organizations with younger employees, who are often starting or growing their families, will have different needs compared to those with older employees likely caring for aging relatives. For companies with more mid-career employees who are part of the “sandwich generation,” their needs will likely be magnified by the demand to care for multiple generations. One study found there are about 2.5 million Americans who care for both an elderly relative and children at the same time.2
“Those who are in the sandwich generation but do not have paid family leave, are more likely to be stressed at work because they can’t adequately care for their loved ones,” says Sander VanderWerf, senior vice president of Aon’s Time Away and Life Solutions practice. "Is that lack of emotional wellbeing hurting their performance? Are they leaving the workforce altogether? Companies need to consider these questions.”
2. Determine how well existing leave policies address current needs: Involve employees in assessing how well your current paid leave policies fulfill their needs and identify gaps to address. Even if this process reveals that current company policy is ideally suited to employee needs, there is value in soliciting employee feedback to help continually evaluate and evolve paid leave and broader benefit offerings.
3. Examine alignment of current strategy to the company’s commitment to diversity, equity, inclusion and belonging (DEIB): Caregiving responsibilities disproportionately fall on female colleagues, as 60 percent of caregivers are women. Women of Color are also disproportionately prevalent as caregivers.3 Thus, a company’s paid leave strategy can impact the makeup of its workforce, especially if women are leaving the workforce to provide care. Look at the broader landscape and consider how current policies support women, People of Color, and the engagement of employees with personal and family health issues.
One additional factor to consider is the cost of productivity to the business. The Family and Medical Leave Act of 1993 (FMLA) provides employees with unpaid leave and job protection. However, on average, only 15 percent of the workforce takes FMLA leave to provide care. This is in spite of the fact that two in five adults provide regular care to a family member.4
There are legitimate concerns that if an employer offers more paid time off to care for family members, employees will use the time more readily than they would use unpaid FMLA, and in turn, increase the cost of replacement workers. These concerns can be mitigated with phased implementation to help employers manage increased costs over time, and course correct as necessary. Other strategies include adopting a waiting period for new employees or offering partial pay during the leave period.
Just as important as costs, though, are the savings. The cost of permanently replacing workers who must leave the workforce in order to provide care for a relative likely outweighs the cost of providing leave. Similarly, the value of attracting and retaining talent based in part on the ability to provide paid leave is significant.