The irresistible rise of the paid parental leave policy

Alan Hickey

November 12 2019

Last Thursday Vodafone Ireland announced that employees will benefit from an entitlement to 16 weeks of fully paid parental leave from April 2020. 

Hewlett Packard Enterprise was hot on Vodafone’s heels when it revealed details of a paid paternity scheme the following day. 

Both announcements came in the wake of an announcement by Diageo earlier this year confirming that the drinks giant has equalised their maternity and paternity leave policies. These moves by domestic employers mirror similar international parental policy shifts at Goldman Sachs and Standard Life Aberdeen.

So why are large employers both at home and abroad trying to equalise the experience of men and women following the birth of a baby?

Diversity and inclusion or employee retention? 

There are two principal factors at play. The first is the wider societal drive to eradicate gender inequality and the second is the tight labour market. 

From an equality point of view, the more time men take out of their careers to help with child-rearing duties, the less inequality between the sexes should develop in terms of pay and career advancement. Larger organisations are also likely to be wary of gender pay gap reporting legislation that is scheduled to come into effect next year. Taking action to prevent or reduce a gender pay gap now reduces the risk of encountering difficulties later when the new reporting law comes into force.   

The other more immediate concern for employers is the war for talent. Generous parental leave policies are being developed as a way to attract and retain staff. By adopting this approach, these businesses are seeking to stand out as employers of choice in a highly competitive labour market.

SME perspective

While large multinational organisations develop their own parental leave policies, small businesses remain reliant on state supports to facilitate working parents. The recent addition of a new parent’s benefit is recognition that the existing structure of maternity leave and paternity leave (which provides a substantially longer paid benefit to the mother) is flawed and does nothing to help the SME sector offer an alternative to the new packages being offered by large multinationals. 

Small businesses are also reporting that they find it difficult to keep track of the increasing range of family-friendly state benefits. The fact that large multinationals are taking parental leave matters into their own hands signals that it's time for a review of the current system which already comprises of: 

  • Paid maternity leave 
  • Unpaid maternity leave
  • Paid paternity leave 
  • Paid adoptive leave 
  • Unpaid adoptive leave 
  • Paid parent’s leave
  • Unpaid parental leave

If you also consider related leaves like force majeure leave, health & safety leave, and carer’s leave, it's easy to see why SMEs find it difficult to keep up.  

In light of these developments, one might well question whether or not the Oireachtas’ ambition will catch up with that of large employers in Ireland. As some of the largest employers in the state are responding to the feedback of their employees, it appears to be high time that family-friendly state benefits are likewise updated to give the SME sector a fighting chance in the war for talent.  

If you would like further complementary advice on paid parental leave from an expert, our advisors are ready to take your call any time day or night. Call us on 1890 252 923 or request a callback here.

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