Paid leave becomes a key factor in retaining talent

When advocating for paid family leave, Shama Skinner used her own pregnancy experience as a practical basis.

"The first three months after a baby is born have a term called the 'fourth trimester.' I understand why it's called that, because during that time, there's still a strong connection between mother and baby," she told HR Dive. "I know not everyone feels this way, but my personal experience was that I really needed to be at home, fully caring for my baby."

Currently, the only federal leave policy in the U.S. government is the Family and Medical Leave Act. That law provides employees with 12 weeks of unpaid leave with basic job protection. Skinner, the chief operating officer and interim CEO of period product company Thinx, enjoys a comprehensive benefits package: the company offers 16 weeks of paid family leave for birthing and non-birthing parents as well as adoptive parents.

"During those three months, you can't sleep well at night. If you have to work a full day and then continue working at night, you can't bring your best self to work or to your family. That benefits no one," Skinner said. "It's not good for families, and it's not good for the workforce."

That's why she advocates for adding resources at the federal level. Along with Patagonia's Jenna Johnson, Reddit co-founder Alexis Ohanian, Melinda French Gates, and other business leaders, she is calling on Congress to provide paid family and medical leave programs for all Americans. The video was released on July 22 and produced by the National Partnership for Women & Families (NPWF).

"We're pushing this business support because when companies truly examine paid leave, they understand it's about gender equality and keeping women in the workforce," said Lelaine Bigelow, interim vice president of congressional relations and economic justice at NPWF.

Gender roles push women out of the workplace

Over the past 18 months, a large number of women have left the workforce. For context, this February, according to data from the National Women's Law Center, the female labor force participation rate (57%) had fallen to its lowest level since 1988.

Economic and childcare experts say outdated views on gender and parenting are to blame. "The data from the past year fully confirms this. It stems from ignoring 'women's work,' such as unpaid care for children and the elderly," Bigelow said. "Women suffer more than men due to a lack of paid leave because in the U.S., women still bear most caregiving responsibilities. They're expected to provide care because, due to the wage gap, they may earn less than men."

McKinsey's 2020 "Women in the Workplace" report confirms that childcare-related attrition issues do exist. In the survey, 10% of childless men and 12% of childless women said they had considered slowing their career progression during the pandemic. In comparison, 11% of fathers and 15% of mothers said they were considering stepping back.

Ten percent of childless men and women, respectively, expressed interest in leaving the workforce entirely. Meanwhile, 11% of fathers and 18% of mothers said they planned to resign. For parents with children under 10, the numbers were even higher: 13% of fathers and 23% of mothers.

Skinner noted that new parents have few childcare options, especially because public schooling typically starts around age five. She explained that's why Thinx provides employees with a monthly childcare subsidy of $800. Of course, most parents aren't so fortunate: in a survey conducted by OnePoll and SitterCity in July 2021, 45% of respondents said they didn't even know where to start when planning for childcare.

So, as McKinsey data shows, the number of parents considering leaving their jobs to care for children is not surprising.

Private employers can fill the federal gap

The U.S. has long been seen as a laggard on paid leave. "I know people don't like comparisons to Europe, but I think it's an important comparison. They've been doing this for years," Skinner said.

"Many industrialized nations have established national paid leave programs," she continued. "It's surprising that the U.S. has nothing—let alone anything comparable to the programs offered by other industrialized countries."

According to a report from the International Labour Organization, Canada, Mexico, most South American countries, a considerable number of African nations, and many Asian countries also have federal paid leave programs.

Currently, the American Families Plan is where advocates place their hopes for the U.S. to catch up. In short, the legislation would ensure that all children under age five have access to "high-quality care." Combined with a permanent child care tax credit, it would also "provide comprehensive paid family and medical leave," allowing employees to take time off for a new child, a seriously ill relative, or their own serious illness.

From a policy perspective, Bigelow said her ideal program would be universal 12-week paid leave. "That means gig workers, domestic workers, farm workers—everyone would have access to paid leave," she explained. In addition to job protection, the policy should also include a "comprehensive scope of purposes," she said.

Ultimately, paid leave promotes talent retention

Beyond boosting morale and productivity, reducing company expenses is an additional benefit of retention. Lower turnover means less capital expenditure on recruiting, hiring, and training, Skinner said. To some extent, this rationale also applies to her own company.

"We're a company with a predominantly female workforce. In leadership, we do have young children. So this is an important issue for us. We have a group of talented people, and we want to retain all of them. At the end of the day, that's what matters," Skinner said.

The art of talent retention is a major focus across companies. In June 2021, research firm West Monroe Partners surveyed 150 executives (each leading a company with revenue of $250 million or more). When asked about the biggest threat to their business in the third quarter, 49% of respondents cited hiring and retention. Notably, 11% of respondents said their biggest hiring challenge was keeping up with turnover and attrition rates.

COVID-19 sparked more candid conversations about wages, benefits, and "labor shortages," pushing the importance of retention into the spotlight. "We all know those articles about the 'Great Resignation,'" Bigelow said. "Think about myself—if I were looking for a new job... wouldn't I want to work somewhere where I know that if a family crisis or COVID-19 happens, I can handle it without worrying about my job?"