By this time, those of you who follow business news have probably already heard that Netflix is offering up to a year of paid maternity leave for both parents (assuming they both work for the company) after a new child is brought into the world. The way they’ve structured the offer, the paid leave is “unlimited” during that period so that they can take a few weeks, a few months or the entire year and they won’t have to file for disability insurance or other state and federal programs to continue having an income during that period. It’s an interesting model to be sure and new parents are no doubt thrilled. There’s also more than a little chatter in the business community implying that this is going to put pressure on other companies to follow suit.
Perhaps. We shall see. And before going any further it’s worth noting that this was a decision arrived at by the management and owners of the company, not some government mandate from on high. If that works out for them, all the better. But that “pressure” comment I referenced has led some of the usual voices on the left to identify this as a big government ball which they can pick up and run with. One sterling example comes from Elaine Eisenman, who wrote an editorial on the subject for CNN this week. The title really says it all: Paid parental leave is a right, not a favor.
(I’ll give you all a moment to recover from slamming your heads into your desks.)
In expanding paid parental leave this week, Netflix rises to the top of a relatively small number of major companies that provide substantial benefits for employees who are raising families. This is great news for their employees, and a sad reminder of the situation that about 87% of parents face…
It is time for all employers to realize that companies such as Netflix aren’t simply generous. Rather, they are shrewd in redefining the competitive playing field for talent. In truth, the only unbeatable point of differentiation in the marketplace is talented people, and talented people flock to companies that support their goals, both professionally and personally.
Paid parental leave may well become a cornerstone of business success. The question, then, is how to develop both policy and practices that can and do simultaneously support family and work needs. Creating realistic solutions to these challenges is essential for all businesses, big and small.
The sad part of this discussion is that the author makes a number of completely valid – and important – points once you strip away all of the talk of “rights” and hints about government intervention. There are a number of benefits offered by companies (and here’s a hint… they’re called “benefits” for a reason, sports fans) which make the outfit more attractive to potential employees. The more talent you can get to apply, the more selective you can be, ensuring that you have the best and the brightest working for you.
But every company has to factor in what sorts of benefits they can afford to offer and still remain viable in a competitive market. Netflix is no different and they’ve clearly decided that the bottom line will survive if they offer this sort of bonanza. Win or lose, the decision is theirs and they’ll have to live with the results. Of course, not everyone thinks it’s going to be a winner, such as Catey Hill at Market Watch.
But the harsh reality is that giving employees unlimited time off might mean they actually take less vacation. “Unlimited vacation can backfire,” says executive coach and management consultant Marc Dorio.
In fact, when Evernote began offering unlimited vacation to its employees in 2011, they noticed that some people were actually taking less vacation, hoping that by taking less vacation they’d look better to their bosses, Bloomberg revealed. The company then began paying people $1,000 to take a vacation.
Bruce Elliott, the manager of compensation and benefits for the Society for Human Resource Management, has studied this issue extensively and says that, in some cases, it does mean a worker will take even less vacation, though overall, the policy has little impact worker behavior. “Employees won’t take any more or less than they would normally take,” he says.
Catey is talking about something called “work martyr syndrome” which describes the rather cutthroat, competitive environment in many high end, well paying companies. Even if the benefit is in place, your coworkers may wind up using that to their advantage if you disappear for long periods. There are other complications as well.
But back to the CNN editorial… we need to not confuse “rights” and “benefits” here. As a worker you clearly have certain rights. Safety is foremost among them and employers should be punished for demanding that employees work in conditions which threaten their lives or health. But most of the actual perks you receive as an employee are – and should remain – optional on the part of the employer. If they don’t offer enough, their talented folk will head for the doors and sign on with those who offer more. But if they offer too much, they may wind up closing the doors and then nobody will have a job.
Unfortunately, as soon as you get the government involved that choice goes away. And Uncle Sam isn’t going to give you a new job if the place shuts down.