Revolutionizing Parental Leave: How CHROs Can Drive Retention and Loyalty in the Modern Workforce

If you’ve scrolled through your LinkedIn feed recently, you’ve probably seen that the conversation around supporting working parents is growing louder. Many employees are struggling to balance caregiving responsibilities with their professional roles, and they need more than just the basics to thrive. Enhancing current efforts to support these caregivers isn't just a compassionate move — it’s a smart business decision that strengthens retention, engagement, and overall workplace culture.

Let’s face it: paid parental leave is no longer just a nice-to-have benefit relegated to global corporations who leverage it to comply with European parental leave standards. It’s become a strategic necessity in today’s competitive job market - right here in the U.S. As more companies have come to recognize the value of family-friendly policies, parental leave has emerged as a powerful tool for attracting and retaining top talent. 

A 2023 study found that 59% of employers believe family-friendly policies like paid parental leave are essential for recruitment and retention efforts, according to Parento. That means that for CHROs and people leaders, this represents a pivotal opportunity to not only support their workforce but also drive organizational loyalty and retention.

If ever there was a time and a place to become a leader in this space, it’s here and now.

The Current State of Parental Leave

In the U.S., only 27% of private-sector workers have access to paid family leave, which highlights a critical gap in benefits affecting millions of employees. Employees are burning out, feel unseen, and are often forced to make the (impossible) choice between having a career and having a family. The lack of support from their employers inevitably (and unsurprisingly) leads to higher turnover rates, reduced employee morale, and a significant impact on company culture. And since the cost of replacing an employee is around 150% of their salary, offering robust parental leave isn’t just a perk for companies that wish to stay competitive, it’s business critical.

What’s worse, the disparities in parental leave benefits often contribute to inequities in the workplace, particularly for working mothers who are more likely to bear the brunt of inadequate leave policies. For companies wishing to actually build an inclusive and supportive environment, addressing this gap is not only a matter of compliance or keeping up with industry trends — but also a matter of values.

The Business Case for Improved Parental Leave

If we look beyond the human side of offering paid parental leave, we’re left with numbers that don’t lie. Data shows that providing 12 weeks of paid parental leave can reduce employee turnover by up to 70%, particularly among working mothers. That means that offering enhanced parental leave policies can have a profound impact on employee retention. When companies invest in their employees’ well-being through supportive leave policies, they are also investing in their own success. Win win.

Need more convincing? Employees with access to paid leave are 10-15% more likely to stay with their employer long-term, leading to significant cost savings in recruitment and training. It gets even better: Providing paid leave benefits companies beyond retention. That’s because engaged employees are more productive, more loyal, and more likely to advocate for your company as a great place to work. 

Practical Steps for CHROs

For CHROs looking to make a meaningful impact, enhancing parental leave policies should be at the top of the agenda. Here are some actionable steps to consider:

1. Evaluate Current Policies: Start by assessing your current parental leave offerings and benchmarking them against industry standards. Are your policies competitive or are they just the bare minimum? To take it a step further, survey your employees to learn which types of policies they would most benefit from. And then? Actually use their feedback to assess whether your current systems meet the needs of your workforce. Let employee experiences and pain points be your guide.

1. Implement Flexible Leave Options: In today’s day and age, flexibility is key. Returning to work after becoming a parent (whether it be for the first or fifth time) can be extremely stressful. Consider offering options like staggered returns, part-time work arrangements, or extending leave beyond the minimum requirements. The goal is to provide choices that cater to diverse family situations and reduce the stress of returning to work. Don’t forget that employees who don’t feel torn between work and family will reward you with their loyalty and productivity.

1. Enhance Return-to-Work Support: Comprehensive return-to-work programs can make a significant difference in helping employees transition back smoothly. This might include phased returns, access to mental health resources, or dedicated re-entry coaching. With countless resources available, you won’t even need to bring these programs in-house: outsourcing to third parties that specialize in return-to-work support will alleviate the burden on your team and support your employees who need it. Doing so will reinforce their connection to the company and ease their adjustment period.

   
   

2. Align with State Programs: Be sure to stay informed about state-level leave programs, such as Oregon’s recently launched paid family leave program. This will help you align your policies with broader initiatives, ensure compliance, and allow you to increase the level of support you offer employees by integrating existing state benefits with your own programs.

Rethinking parental leave as a strategic tool is no longer optional for companies that want to thrive and reduce unnecessary turnover. By enhancing parental leave policies, CHROs can drive retention, boost employee morale, and build a loyal, engaged workforce - all while benefiting the company’s bottom line. 

Let’s Take the Next Step Together

Ready to transform your parental leave policies and create a more supportive workplace, but not sure where to start? Book a consultation with CARRY™ Consulting today to develop or enhance your parental leave strategies and start driving real change in your organization.