How Offering Maternity Leave Can Pay Off for Small Businesses

Paid parental leave—or, more precisely, the widespread dearth of it in the United States—has become the issue du jour for Democrats. The Hill reports that mandatory paid leave will be the party’s next big pocketbook issue in 2015.

And it’s about time. The United States is one of only two first-world nations (the other being Papua New Guinea) that doesn’t support mandatory paid maternity leave. See how countries stack up on this issue here.

Courtesy Keep Calm-O-Matic

Small and medium-size businesses are more likely not to offer paid maternity leave than large companies because of the costs incurred by prolonged employee absences. The Family and Medical and Leave Act, which mandates that companies offer 12 weeks of protected maternity leave (which could be paid or unpaid), doesn’t compel businesses with fewer than 50 employees to comply.

But a recent white paper released by the International Labour Organization, an agency of the United Nations, argues that many small-business owners underestimate the value of maternity leave—and overestimate its costs.

A few key takeaways from the study:

  • Maternity protection regulations can create social norms and a practical framework through which to manage staff maternity. They free small and medium-size employers from the costly act of negotiating the many ethical and practical problems that would otherwise arise in managing pregnancy, childbirth, and care of a newborn.

  • [Paid parental leave] in excess of what is legally required (but also career breaks and extra vacation), together with a supportive workplace culture was significantly linked to a range of positive outcomes…staff retention, customer/client satisfaction, and [positive] relations among employees.

  • Effective and accessible maternity protection as part of wider family-friendly programmes can have a range of positive outcomes in small and medium enterprises, including effects on quality and development of products and services, staff retention, customer/client satisfaction, enhanced relations among employees, reduced staff turnover, happier employees, and increased productivity, sales, and profitability.

  • Employees who stated that their employers were providing several initiatives beyond legal requirements, such as special leave to take care of dependents, flexible work schedules, maternity leave and child-care facilities, were more committed to their organizations than those in other organizations.

  • Family-supportive practices and cultural norms in small and medium-size businesses can have impacts on a range of positive social outcomes that are not only valuable in their own right, but also have the potential to enhance human capital—and ultimately translate into positive enterprise-level performance outcomes.

JCK Magazine Editor