Article: Why parental leave can be a game changer for companies and employees

Employee Relations

Why parental leave can be a game changer for companies and employees

The key to success in a business revolves around focusing largely on employees, who can be more productive once granted welfare measures like maternity and paternity leaves.
Why parental leave can be a game changer for companies and employees

It's no surprise that the idea of offering strong parental support to both mothers and fathers is redefining the worker-employee relationship in a growth-driven work environment. And more and more companies are realising the need.

The extended policy, projected as a component of work-life balance, is said to be a sure-shot way to improve employee engagement and retention.

Employers claim such an ‘employee-friendly’ initiative helps employees de-stress in the long run, scale up productivity and motivation, which ensures a two-way benefit to both sides.

Soon after an amendment was brought to the maternity leave policy in India, many private sector companies have started introducing extended leave policies. The idea behind the move was to reduce the attrition rate.

Rajasthan-based Saraf Furniture and start-up CoinSwitch are among a few firms which are focusing on making the leave policy more employee-friendly and flexible.

Tweaking its parental leave policy as part of its enhanced benefits programme, CoinSwitch recently extended the maternity leave to 34 weeks (8 months) and paternity leaves to four weeks (one month). Saraf Furniture also announced to provide one-year maternity leave to expecting mothers.

“The decision to extend maternity and paternity leaves is to create a workplace that empowers each and every employee to give their best,” says Zeeshan Ramlan, director and head—HR, CoinSwitch.

On the provision of parental leave and its impact on business, Ramlan says most of our employee benefits are introduced with an aim to enable people not necessarily to have a direct correlation to business impact.

“A positive business impact will be the cherry on the cake. And data shows that happy employees are productive employees. A workplace, which is equal for all, equips us to achieve our professional goals. This is why diversity and inclusivity must be a central tenet of the companies. It helps us better serve the diverse users in India and to be the one-stop wealth-tech destination for every Indian,” feels Ramlan.

A conducive environment, expanding employee benefits and promoting parental leave policies, says Shalini Nair Kumar, Head of People and Culture, India and Asia Pacific, Amadeus; helps employees return to work afresh, and be more engaged with a renewed sense of commitment.

“Businesses that implement gender-neutral parental leave policies instil progressive and futuristic culture. Not only are they breaking stereotypes but also influencing the overall productivity of the company by attracting and retaining top talents. The key is not only to offer initiatives or have changes in policies but to encourage every employee to take advantage of them. The benefit-oriented move then ensures greater job and family satisfaction for employees, who greatly contribute to overall business success,” adds Kumar.

Roadblocks to overcome challenges

Some preconceptions are widely held across teams in organisations. “For instance, employees, who are specialised in specific jobs, require backups is one such perception in companies. Organisations must pay more attention to such notions that come with employees, who take parental leave and provide the support necessary to prevent any negative impact on the team dynamics. At the same time, organisations can certainly plan ahead and make backup options for the employee taking paternity leave,” explains Kumar.

India introduced the Maternity Leave Act in 1961 and it was amended in 2017. The amendment mandates most employers to offer a generous 26 weeks of paid maternity leave along with a crèche facility on the office premise. The move is aimed at ensuring active participation of the women workforce, providing equality, and regulating their employment for a certain period before and after childbirth. Female government servants are entitled to 135 days leave on the adoption of a child up to one year of age. However, there is still no nationwide policy for paternity or adoption leave for male employees.

Post the amendment of the Maternity Benefit Act, 1961, women employees in India are eligible to get maternity leave of 26 weeks (182 days), the highest among Asian countries. Before the amendment, the duration of maternity leave was limited to only 12 weeks (84 days). The Act was implemented by the central as well as by state governments.

Maternity leaves in India and Southeast Asian nations

India offers leave for 182 days, which is the highest number of maternity leaves, to its employees.

Highlighting the need for a gender-neutral parental leave policy, Ashish Kumar Singh, CHRO, Meesho, says that revamping paternity leave from the lens of a gender-neutral parental leave will be a significant move towards fostering inclusion, diversity, and equity in an organisation.

“With changing times and evolving workplace dynamics, an empowering culture coupled with forward looking policies is expected to set the precedent. The future of work will be defined by practices that harness a people-first mindset, break the stereotypes, make room for and welcome new changes,” adds Singh.

Vietnam offers 180 days of maternity leave, followed by Singapore (112 days), the Philippines (105 days), Malaysia (98 days), and Indonesia (90 days).

Leave policy in Australia and New Zealand

Australia has a policy to offer up to 18 weeks of PLP, which is paid at the National Minimum Wage to eligible employees, who are the primary care giver of a newborn or newly adopted child. In New Zealand, employees are entitled to have up to 52 weeks of parental leave (26 weeks of primary carer leave and a further 26 weeks' extended leave).

Companies that provide higher paternity leave

Meesho

30 weeks

OKCredit

8 weeks

Razorpay

30 days

Twilio

12 weeks

 

Country-wise paternity leave in Southeast Asia

The state of paternity leave in Southeast Asia is not very promising as compared to the Nordic countries. Among Southeast Asian nations, the Philippines, Vietnam, Myanmar and Indonesia have paternity leave policies of different durations, wage replacement rates, funding sources and eligibility requirements.

Country

Days

Start year

The Philippines

7-14 days

1996

Indonesia

2-30 days

2022

Vietnam

5-14 days

2016

Myanmar

15 days

2012

 

Return on investment (ROI) of the initiatives

Attracting and retaining valuable resources is essential as employers compete for talent and constantly look for ways to build the business. “Providing benefits such as parental leaves to the workforce is key to inculcating employee commitment and productivity, which further ensures business success. This also encourages an employee to proactively balance their work and life and develop a more sustainable style of working,” notes Kumar.

The management must identify important employment policy issues for building successful workplaces.

“Ensuring that all parents are available to ensure their children's healthy development does not hinder the organisation from being highly competitive. This, in fact, makes them responsible employers and valuable agents for change, influencing other businesses to build a better culture for working parents. The mechanism to measure the ROI of policies is driven via employee satisfaction and employee brand advocacy,” explains Kumar.

Conclusion

Maternity and paternity leave granted to employees offer a sense of security for parents while raising their children. Absence of such employee-friendly policies might deprive people of tension-free parenthood.

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Topics: Employee Relations, Employee Engagement, Culture, Compensation & Benefits, #Well-being

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