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Paid Family Leave – Its Time Has Come

Too many Americans experience a number of different hardships when taking parental leave for a newborn – or an aging parent. A 2017 Pew Research study found that Americans who received only some pay or no pay when they took family or medical leave:

  • Cut back on spending (78 percent)
  • Used savings set aside for something else (50 percent)
  • Used savings set aside for this situation (45 percent)
  • Cut short their leave time (41 percent)
  • Took on debt (37 percent)
  • Put off paying their bills (33 percent)
  • Borrowed money from family or friends (24 percent)
  • Received money from family or friends that they weren’t expected to pay back (23 percent)
  • Went on public assistance (17 percent)

As of 2016, the U.S. is the only developed country without government-mandated paid maternity leave. Additionally, according to research from the Organization for Economic Cooperation and Development (OECD), the U.S. is one of nine OECD countries that have no leave policies for new fathers. In total, there are 36 OECD countries.

Need for Parental Leave

According to research from the National Institute of Health, children have fewer mental health, developmental and other problems if they have full-time caregivers in the first few weeks and months of infancy. Other research also supports the need for promoting a healthy family environment within our country.

After World War II, with many women in the workforce, employers and lawmakers needed to address the issue of pregnancy on the job. In 1972, the Equal Employment Opportunity Commission drafted guidelines that basically labeled pregnancy as a disability. Six years later, the Pregnancy Discrimination Act of 1978 amended the Civil Rights Act that prohibited discrimination on the basis of pregnancy, childbirth or related medical conditions. However, this legislation did not provide time off – paid or unpaid – to care for a child.

Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act of 1993 provides unpaid leave. But only about 60 percent of private-sector workers are eligible, as it provides 12 weeks of unpaid, job-protected leave with continued health insurance coverage to attend to a newborn or adopted child, a family member, or an employee’s own serious health condition. There are strict eligibility requirements for FMLA, such as needing to have worked at least 1,250 hours for an employer with 50 or more employees during the 12 months before the start of the leave.

Employer Role

Employers, for their part, have been adding parental-paid leave at their workplaces. According to a Society of Human Resource and Management (SHRM) survey in 2018, 27 percent of U.S. employers offered paid leave in 2018, a very slight increase from the prior year. A 2015 survey by Mercer reported about 25 percent of U.S. employers offered paid-parental leave for employees to bond with a new child, while in 2018, Mercer found this dramatically increased to 40 percent. Mercer also reported that the median number of weeks employers offer to birth parents in their paid leave policies was six weeks, a number similar to their 2015 findings. Most employers who do provide some type of paid maternity leave tend to be larger organizations and is dependent on their given industry.

As an example, according to the National Compensation Survey (BLS) in 2016, 37 percent of the finance and insurance sector employers offered paid-family leave, while 10 percent of manufacturing and six percent of leisure and hospitality offer such programs.

As mentioned in an earlier blog, we are in the midst of randomly surveying Iowa organizations to learn about the prevalence of various ‘work-life’ benefits in the workplace – which includes paid leave, unpaid leave, and a host of other ‘convenience’ benefits that help assist employees and their family members.

Being able to pay for this benefit is a big hinderance for many employers, and yet, according to SHRM, not having these plans in place can cause skilled workers to leave for employers who do offer such plans. Additionally, SHRM estimates that every time an employer loses an employee, it will cost the equivalent of six-to-nine month’s salary to replace and retrain a replacement – and considerably higher for highly-skilled employees.

The moral of this story is that employers may be wise to pursue the costs up front by offering paid leave programs.

Federal Traction on Paid Family Leave

Despite the gridlock in Congress to pass meaningful legislation on basically anything of substance to Americans, there does appear to be some hope that there is bipartisan support for some type of paid-family leave. Iowa’s Senator Joni Ernst, along with Utah Senator Mile Lee (both Republicans), announced last month a bill that would allow new parents to take paid time off for their children. Known as the “Cradle Act,” the bill would allow Americans to draw from their Social Security funds to take time off from work.

Two other bills involving paid leave are currently being kicked around. The Working Parents Flexibility Act proposes to create tax-exempt savings accounts which can be used to pay for childcare. This appears to have bipartisan support in the House and is moving to the Senate. The problem with having accounts, similar to Health Savings Accounts (HSAs), is that not everyone can afford to set money aside to pay for this benefit. The other bill, FAMILY Act, proposes offering 12 weeks of partially-paid parental leave to all employees who fall under the protection of the FMLA. Funding would be provided through employer and employee payroll taxes. Five states already have a similar mandate in place: California, New Jersey, Rhode Island, New York and Washington. Again, employers with fewer than 50 employees are not impacted by the FMLA.

As employers continue to search for opportunities to obtain and retain a highly-valued workforce in the future, paid-family leave programs will be a large trend in the years to come.

Balancing competing demands of work and family are important reminders to having healthy and thriving families within our workplaces and communities.

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Working Remotely – It Comes at a Cost

I sometimes joke that my “international headquarters” is located in Clive, Iowa, with satellite offices peppered “throughout the globe.” Technically, there is a great deal of truth to this seemingly impressive boast. However, fact and fiction become more clear after revealing my true workplace arrangement.

My office is indeed based in Clive, but I don’t participate in daily or weekly employee meetings. I do not gossip at the water-cooler – heck, I have NO water cooler! My office consists of one person – ME. When I am not physically in the office, I can be anywhere and everywhere still transacting business – with the assistance of my laptop, iPhone and iPad (Wi-Fi is a critical ‘friend’ to me). Even though I have a physical office, I often feel that I work ‘remotely’. Much of what I do is by myself or orchestrated with a few trusted third-parties. I have come to like this ‘remote’ arrangement a great deal. But it does come at a cost.

According to a 2017 Gallup survey, 43 percent of 15,000 employed Americans said they spent at least some time working remotely – usually from their own home. This represents a four percent increase from 2012. In our 2016 Iowa Employer Benefits Study©, we found that over 34 percent of employers with more than 101 employees offer flextime, while just over 14 percent of employers with fewer than 101 employees did. Flextime allows for employees to customize their schedules within a certain range of hours and days. Unfortunately, these results do not specifically reveal how many Iowa employers allow employees to work remotely.

Flexible scheduling and working remotely are increasingly important factors for employees to take (or leave) a job. Employees argue, and many employers acknowledge, that these practices are beneficial for both – workers are more productive for their organizations (an obvious win for employers) while being able to more successfully navigate through their own personal work-life issues (a win for employees). Working remotely and having flexible hours also provide financial upsides to employees –  savings in lunches and transportation costs, along with having greater childcare flexibility.

A 2015 Employee Job Satisfaction and Engagement report by SHRM indicated that 55 percent of employees cited that flexibility to balance work and life issues was a very important aspect of their job satisfaction. This same report found that leading reasons employees would not leave their jobs within the next year was primarily due to compensation/pay (45 percent) and having the flexibility to balance work and life issues (42 percent).

But, as I have personally found, working ‘remotely’ does have some drawbacks. Here are two of the largest challenges that employers (and employees) should be cognizant of when working remotely.

Social Connectivity Can Suffer

Social connectivity drives the engine of our mental well-being. Connectedness within the workplace plays a vital role for employees to feel they are seen, heard and valued through organizational relationships. Working remotely can easily isolate one from social inter-activities that is crucial for employees who yearn to have the ‘sense of belonging.’

According to the 2018 State of Remote Work, surveyed employees who work remotely reported the two biggest advantages were having a flexible schedule (43 percent) and spending time with family (15 percent). But, if not careful, these advantages can be offset by loneliness (21 percent), reduced collaborating/communicating (21 percent), having distractions at home (16 percent), and staying motivated (14 percent).

To go one step further on social isolation and loneliness, as more people in the U.S. are living alone, some researchers are warning this could become a “greater public threat than the widely discussed problem of obesity.” That should grab our attention!

To combat the negative side-effects of loneliness, employers might encourage (or establish policies) requiring remote workers to come to the office once a week to learn and grow. Studies suggest this approach is more likely to generate happier employees compared to fully-remote employees who don’t physically reconnect with the office.

Some employees may be quite geographically remote, and perhaps it would be more realistic to have them come to the office monthly or quarterly. Speaking from experience, the most rewarding days at my office usually result from having face-to-face meetings with various individuals that I would otherwise correspond with via phone or email. Embracing the opportunities to physically meet with others should always be a priority – it is for me.

Stress or Burnout

This may sound somewhat counterintuitive to some of us, but working remotely can nudge employees to work longer hours to please their supervisors, just because they are grateful for having the opportunity to work remotely. For me, if I don’t stay on top of my self-imposed projects, they will not be completed. This responsibility causes added pressure to ALWAYS be engaged with my work, sometimes more than I really should be.

Unintentionally, employees may burnout from performing this additional work without the employer having the benefit of monitoring the employee’s well-being throughout a course of time. That is why it is so critical for organizational leaders to engage with remote employees about what is going on – not only in their work – but with their personal lives. Feeling isolated has large, emotional costs.

As workplaces continue to morph into new environments that require employees to work remotely, it is imperative for leaders to find ways to have regular ‘face-time’ to ensure the worker does not lose the social connectedness that will keep them both happy and productive. This same principle applies to entrepreneurs who are working on their own.

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The Value of Employee Benefits…
It’s a Passing Parade

Portland Grand Floral Parade 2016

Portland Grand Floral Parade 2016

On the eve of receiving our new 2016 Iowa Employer Benefits Study survey results, I once again have a great deal of anticipation about what this data may reveal. At this point, I only know that 1,014 randomly-selected employers responded to this survey which continues to exceed our annual goal of 1,000. A big ‘thank you’ to all organizations that took the time to participate in this annual work!

Offering workplace employee benefits has been happening for decades. From the employee perspective, receiving various workplace perks is a staple expectation when being interviewed and ultimately hired by most employers. In fact, recent research conducted by staffing and HR service company, Randstad US, shows that jobseekers most value salary, employee benefits, long-term job stability and a pleasant work environment.

Employers, for their part, offer employees and jobseekers a cadre of benefits they believe to be highly-valued by their mainstream targeted ‘audience.’ But it is extremely important for employers to dissect their intended audience by gender, age groups (e.g. generation), location, race and other factors that will help clarify the benefit ‘value’ employees desire. By not doing so, a disconnect will eventually occur, resulting in a large chasm of a wasted investment that is costly, both in terms of money and desired human capital.

Conducting biannual employee engagement surveys may eliminate much of the guesswork that employers have when trying to predict which future strategies to embrace. I suspect that a healthy chunk of employers put their human investment strategies on cruise control assuming that the desires of employees five or ten years ago will still apply in today’s world. Most often, they do not.

Much like a New Year’s Day or Fourth of July parade, a perpetual flow of people (and floats) coming and going will not be replicated again. In a similar fashion, so does the employment pool that organizations continue to encounter.

One example on how employers respond to the ‘new parade’ of employees can be found through three employers: Aetna, Fidelity and PricewaterhouseCoopers. All three have launched their own student loan matching programs for employees who are pursuing undergraduate and/or graduate-level degrees.

Beginning in 2017, Aetna’s full-time employees will qualify for matching loan payments of up to $2,000 per year, totaling $10,000 per student. Part-timers will receive half of this amount by pursuing undergraduate or graduate degrees from accredited institutions.

According to the Society of Human Resource Management (SHRM), about 3% to 4% of all U.S. companies contribute to employees’ student debt payments to help soften the financial burden they increasingly face. About 71% of college graduates carry student loan debt, totaling $1.3 trillion of student debt in this country. A need clearly exists to help alleviate financial hardships and new approaches must be pursued.

Our annual study’s purpose is to survey employers about the key benefits they offer at this particular point in time. It allows employers to compare their benefits with the mainstream. However, the juxtaposition of organization culture and employee attributes can allow any organization to stake a claim on having a competitive advantage when attracting and retaining their most prized asset – the employee. To do this, the organization will need to account for what is most important and valued by their employee population.

So enjoy this year’s parade, but be ready for upcoming attractions that may appear in the next one.

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