Netflix’s parental leave policy is a game changer
Netflix changed the game when it came to video rentals. Now, the company may be doing the same as an employer with the announcement of a new policy allowing salaried employees, female and male, to take as much time off as they want during the first year after a child is born or adopted.
"We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances," wrote Tawni Cranz, Netflix’s chief talent officer, on the company’s blog. "Parents can return part-time, full-time, or return and then go back out as needed. We’ll just keep paying them normally, eliminating the headache of switching to state or disability pay. Each employee gets to figure out what’s best for them and their family, and then works with their managers for coverage during their absences."
According to Ms. Cranz, the decision to offer this benefit, was a recognition on the part of Netflix that success was directly related to its ability to recruit and retain top talent. The company, which has about 2,000 salaried workers, has found that employees who are not worried about their home lives perform better at work. The new policy aims to help its employees "return to work more focused and dedicated."
As reports have pointed out, an expanding list of companies including, Apple, Facebook, Google and Microsoft, offer leave programs that go beyond federal requirements that allow for 12-weeks off (pay not guaranteed) for individuals working at companies with 50 or more employees.
"We’ve seen many employers expanding their amount of paid leave available, but it would be a small number of industries with a relatively small-to-medium size population that could afford to do something as extensive as Netflix," Mary Tavarozzi, a senior consultant with Towers Watson, told Reuters.
Discussion Questions
What do you think of Netflix’s decision to expand its maternity/paternity leave program? Do you expect the changes made by Netflix to ripple through to a lot of other companies?
Poll
BrainTrust
Ryan Mathews
Founder, CEO, Black Monk Consulting
Paula Rosenblum
Co-founder, RSR Research
While I salute Netflix for this bold move, I can see how other companies could consider it to be potentially detrimental to their businesses.
Netflix operates in an environment with a very competitive labor pool. Offering a perk like this could help them retain current employees and recruit new ones. Millennials, who this decision primarily impacts, are willing to give up salary for a more flexible work schedule.
I expect other tech-driven companies will follow suit, but this may be too difficult for traditional brick-and-mortar retailers.
The United States has some of the most regressive parental leave laws among advanced nations. Netflix’s decision simply moves our commercial culture one baby step closer to the mainstream of advanced global economies.
That said, I think the pragmatic answer is that it will depend a great deal on a.) the competitive nature of a specific sector and b.) the age of that sector.
So, for example, high-tech industries from chip design to biotech have a tough time attracting and holding top talent so they would be most likely to follow the Netflix example.
Now other, more established sectors such as commercial banking and other financial services areas have the same talent problem but more hidebound cultures that may prove more resistant to even the most expedient labor policy decisions.
When it comes to retail …. well … don’t hold your breath.
It’s about time! The U.S. Has fallen woefully behind other countries in this and other policy areas.
I understand there are companies and people fearful of this kind of change, but it’s important to recognize that our current policies are not contributing to national success. Trying something more progressive can’t hurt.
While I applaud Netflix’s efforts and think maternity and paternity leave programs absolutely need to be looked at and expanded I am always hesitant about “take as much time as you need” programs, particularly with large companies. Studies have shown that employees with unlimited vacation days often end up taking less time off than their peers with more structured programs. Workers tend to want to be seen as hard workers and are reluctant to take the time off that would actually help them rest and be more productive workers in the office.
I hope that companies try to balance the personal needs of their workers and realize the importance of happy, rested employees within their company. I hope other companies take a look at their corporate culture before jumping on this ultra-flexible bandwagon.
I’m imagining mine will be an unpopular view, but this seems like overkill. If someone has five kids, they could potentially take five years off, with pay. Doesn’t seem like a winning business proposition for Netflix to me. And with the planet predicted to go from 7 billion to 12 billion people over the next century, I’m not sure it is such a great idea to keep reinforcing that having more babies is what we need to do. And yet, here we are. As for retail, good luck for cashiers asking for a year off with pay to take care of a newborn.
This may work for Netflix and other high tech companies fighting for good talent, but in my world it is unaffordable. Paid leave for up to a year sounds nice, and who wouldn’t want to have it, and again, if your bottom lines are sound then go for it. To my fellow panelists who believe this is long overdue, I understand it for a select few companies who can use this as a recruiting tool, but in retail, especially for small businesses, it simply can not work.
I spent the good part of the morning talking to several supermarket owners and my accountant talking about the possibility of a $15 minimum wage that is trying to be pushed through, as I’m looking for real-world insight from brick-and-mortar stores. Bottom line, it would put most of whom I spoke with out of business, including me, as our payroll, plus fringes, spiraling costs of seasoned employees and new healthcare costs, would destroy what is left of our profits.
This is in no way something I throw out there lightly, as to me small business voices are never heard in DC, but it is very easy to champion higher wages when someone else has to foot the bill, and from the sources I spoke to, I would hazard a guess of around a 30 percent failure rate if this were to be imposed nationwide.
Before I clicked on today, the thoughts of how my fellow retailers are doing was at the front of my mind, and I made several calls to discuss these types of issues. RetailWire definitely stirred up a great blog this morning, and I hope I’m wrong about what I was looking into. I’m glad I can contribute my thoughts daily, and in no way is this a knock on a visionary company like Netflix. I am a simple man and would like to see all small businesses thrive and treat their employees as well as they can, so kudos to those who can enrich the lives of their employees, and hopefully other successful companies will follow.
It is nice that some companies are joining the human race. This American “family-oriented” country has done nothing but fight against family support in every way. Clearly, work carries a higher profile than family in this country.
Bravo for Netflix and other companies that have extended PAID family leave. I believe it is a trend, but one that will be fought tooth and nail, not by the CEOs but by our culture.
It may take a while for the market to discover and understand the trips, tricks and traps of this new employee benefit. At face value there is much for the emerging workforce to consider in favor of this company offer. If Netflix has figured out something new that gives everyone a winning hand then everyone will be playing catch up or settling for a workforce comprised largely of the lower candidate pools. Time will tell all as it always does. For now the company will get a good first look from the top tier of the workforce which may be what they really wanted in the first place.
Although this is a fantastic program for employees and a huge added cost for the companies, I believe the obstacles will be higher in different types of industries. For example, the vast majority of physical stores have very few staff, so the elimination of one or more people for an extended period of time may require the hiring of replacement people to train. That’s an even bigger expense.
It sounds like this is for salaried Netflix employees, but I would think that the company employs a fair number of non-exempt employees as well, particularly in their DVD distribution centers (which they still have, despite that part of the business having shrunk over the years). If that’s the case, how can they justify offering this to some of their employees, but not all of them?
Finally!
The average Netflix staffer won’t take anywhere near a year, but what a relief to have that six-weeks-and-done deadline extended, particularly for mothers who have endured c-sections. You moms out there know what I’m talking about …
Kudos to Netflix for piloting this and bringing this to the attention of those sitting on the sidelines waiting for a leader to step forward. Now, I do not think for a minute something like this could be acceptable or workable in the retail, restaurant or grocery business. But in technology yes, and I hope others grab on Netflix’s coattails with this.
I read a similar story in our local paper today. A largely successful luxury car dealer announced they are raising the pay of everyone employed to a minimum of $16.05 per hour. In some cases this will double the income. Maybe a small epidemic is starting where employee benefits and welfare are concerned.
Love to see companies that think outside the box when it comes to employee benefits, but a whole year? Doubt many will take advantage of that, but it makes for a great perk when recruiting. I also love that they are paying full salary and not turning it over to disability programs.
I suppose we can look for this type of thing more often in high tech companies or others with deep pockets who really can’t afford to lose employees over a little time off. Will be interesting to watch.
But, let’s not forget that these programs are for salaried employees and not the part-timers we have so many of in retail. And also remember, there aren’t many retailers out there with deep pockets. Just sayin’….
For my 2 cents.
There was a piece in the Washington Post recently about female teachers not being allowed breaks when they returned to school to pump breast milk for their babies. I think the concerns expressed today about the lack of support for parents, generally, is well based.
But, at the risk of revealing my usual cynicism, I have to wonder what proportion of Netflix’s salaried employees are of childbearing age. Also, what benefits might they consider offering to parents of young children e.g. allowing them to carry some of that one year’s permitted time off right up to age five perhaps? And what of those employees needing time off to care for elderly relatives? Any chance of that?
I think the length of time off that could be “with pay” is the huge fly in the ointment here. How about a set shorter time with pay for maternity/paternity leave with option of more time unpaid? Have people in HR at Netflix really thought this through? What about other excellent employees who are past child bearing age, or unable to conceive, or have lost a baby, or choose not to adopt? They may view this as a freebee to their co-workers who are partaking of a lengthy stay at home for family reasons and still collecting salary, while the rest are actually working for their pay. No. I don’t think they have thought this through.