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Panorama why paid family leave is good business

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Panorama recently completed a study on "Why Paid Family Leave is Good Business.” This study was co-authored with Boston Consulting Group. This deck provides a concise overview of the report and is a resource for those wanting to learn more about this important issue facing US companies.

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Panorama why paid family leave is good business

  1. 1. “Why Paid Family Leave is Good Business” Co-Authored by Boston Consulting Group and Panorama
  2. 2. • Defining Paid Family and Medical Leave • Current and Changing Dynamics of Paid Family and Medical Leave • “Why Paid Leave is Good Business” Report Findings • Trends • Benefits Outweigh Costs • Lessons from the Leaders 2 | Table of Contents
  3. 3. What is Paid Family and Medical Leave 3 | Paid family and medical leave (PFML) enables an employee to care for a new child or a family member, including themselves. Demand is increasing due to shifts in modern families • Fewer households with a full-time caregiver. • Both parents increasingly involved in child care. • Burden of care is growing with an increasing proportion of the workforce helping to care for aging parents.
  4. 4. 4 Current and Changing Dynamics of Paid Family and Medical Leave 4 |
  5. 5. Paid Leave Improves Gender Equity, Women’s Economic Opportunities, and Health 5 | Workers', especially women's, retention Increased female participation and higher wages Care giving more valued and equitable Promotes gender equality in workforce Improved health for mother and child Long term health benefits and wellbeing for children Women's Economic Opportunity Access to PFML increases weekly hours and pay for employed mothers by nearly 10% Health Access to leave increases birth weight and decreases premature births and infant mortality Gender Equity Access to PFML recognizes the value of care giving and encourages women and men to get involved Courtesy of
  6. 6. Luxembourg France Netherlands Spain Turkey Latvia Slovenia Belgium Japan Sweden United Kingdom Norway Slovak Republic Czech Republic Poland Ireland Hungary Italy Estonia Finland Denmark Australia Chile Portugal Canada Greece Austria Germany New Zealand Switzerland Israel South Korea Iceland Mexico United States 0 50 68 40 35 34 28 26 26 24 22 0 50 20 18 18 18 18 17 17 17 16 0 50 16 16 16 16 16 16 15 15 14 0 50 14 14 14 14 13 13 12 0 All Organization for Economic Cooperation and Development (OECD) countries mandate at least 12 weeks paid maternity leave, and in some cases, parental leave, except the United States 6 | Courtesy of There is growing consensus about the benefits for workers and a growing need and demand for paid family leave. • Yet, the United States is one of just eight countries that doesn't mandate paid maternity leave. • Only four states have policies that support paid leave, ranging from 4 to 12 weeks at partial pay. Federal law only provides for unpaid family and medical leave. The U.S. Is the Only OECD Country That Doesn’t Mandate PFML
  7. 7. 7 | Courtesy of Absent a Federal PFML Policy, Employers Primarily Determine Whether Employees Have Access to Paid Leave • Only 14% of the U.S. workforce has access to employer- sponsored paid family leave • Paid leave coverage has increased just 3% since 2010 • Workers in the highest income quartile are three and a half times more likely to have access to paid family leave than those in the lowest income quartile.
  8. 8. Inequality in Access to Paid Leave Has Grown Between High Wage, Full Time and Low Wage, Part Time Employees 8 | Courtesy of 4% growth seen among high wage workers, while it remains flat among low-wage Coverage of full time relatively consistent, while part time worker coverage declining 0 10 20 30 2010 2011 2012 2013 2014 2015 0 10 20 30 2010 2011 2012 2013 2014 2015 0 10 20 30 2010 2011 2012 2013 2014 2015 0 10 20 30 2010 2011 2012 2013 2014 2015 %oflowwage workers %ofhighwage workers %ofparttime workers %offulltime workers 0% +4% CAGR -4% CAGR +3% CAGR
  9. 9. 9 “Why Paid Family Leave is Good Business” Report Findings 9 |
  10. 10. Opportunity to Move the Needle on Paid Family Leave Through Private Sector Action 10 | Research aimed to better understand which companies are changing their PFML policies and why • Built database of >250 company polices to understand what policies exist • Interviewed >30 primarily large companies with and without paid family leave to identify motivators and drivers What We Did What We Expecte d What We Didn't Expect Expected to find momentum among companies with high profits and in intense competition for talent – which we did Also found companies in diverse sectors that were deciding to offer paid family leave, suggesting opportunity to generate broader momentum through private sector action Courtesy of
  11. 11. 50% 40% $0 30% 20% 10% 0% $100,000$80,000$60,000$40,000$20,000 Coverage "Other services" Wholesale Professional Services Manufacturing Information Education Construction Admin & Waste Accomodation & Food Healthcare Finance Transportation Retail Real estate Utilities # of employees Coverage up 10+% pts from 2010 Coverage up ≤1% pts from 2010 Coverage up 2-9% pts from 2010 Data source: US Bureau of Labor Statistics 2015 wage and occupation data and their National Compensation Survey family leave coverage data 2010-2016. 1. Sector coverage data from private sector, but national average inclusive of employees in the non-farm economy and workers in public sector except those in federal government Average: 14%1 Sectors with coverage significantly above national average employ only 15% of total workers Average wage Highest Wage Sectors Have Expanded Coverage the Fastest, Improving Policies for Only 15% of the Population Courtesy of11 |
  12. 12. Three Unlikely Stories Explain Why there is Optimism Around the Opportunity for More Employer Action 12 | Hilton began providing equal benefits to employees of all types based on its values and a business rationale linked to customer satisfaction – and has encouraged others to meet them where they are A leader in the DOD, interested in talent attraction/retention, built a convincing case based on private sector's moves and experiences, and found a path to expanding maternity leave through the DOD's disability insurance policy Union Square Hospitality Group was determined to prove that even a restaurant group can offer paid family leave. By designing a 4-week, fully-paid + 4-week, partially-paid policy, it can now offer paid, gender-neutral family leave to all employees, hourly and salaried Courtesy of
  13. 13. Companies Are Also Expanding the Length of Leave and Are Increasingly Focused on Gender Neutrality 13 | Courtesy of 7 5 11 11 8 15 0 5 10 15 Birth mother1 Adoptive leaveSecondary caregiver / paternity Averageweeksofleave Companies that have changed their policies in the last two years offer ~3-4 more weeks than average Interviews stressed an increasing focus on gender neutrality "By giving people four months of paid parental leave and six weeks of paid family leave, we're indicating to them that we recognize how important family is for both men and women." – Facebook "We believe family comes first and are pleased to offer family benefits which show our strong support for the modern-day family, no matter what shape that family takes." – Johnson & Johnson 1. Often includes disability leave as well Source: Why Paid Family Leave is Good Business, BCG Perspectives
  14. 14. 14 | Courtesy of Across Large Companies, 7 Drivers Created Impetus for Move In competition for talent, especially tech Influential millennials Desire to retain more women Internal champions European HQ/presence Desire to create positive halo Strong values focus Source: BCG interviews
  15. 15. 15 | Courtesy of Large Companies with These Drivers Seem to Be Willing to Take a Leap of Faith with Imperfect Data 'We needed to do this to attract and keep our talent..but we are not gathering any data on whether it worked' 'We didn't have any numbers proving to us this would work (for talent attraction)...but we are confident it has been positive' 'Sure we did some analysis – but that is not how these decisions are made. This is about our values, and its a smart move' 'We are thinking about the overall benefits package, not cost of each benefit. Paid leave is great ROI' Benefits are not generally quantified... ... and costs less of a factor Source: BCG interviews
  16. 16. 16 | Courtesy of Companies With Paid Leave Policies Report Benefits that Outweigh the Cost
  17. 17. “Why Paid Family Leave is Good for Business” Launch
  18. 18. 18 Lessons from the Leaders 18 |
  19. 19. Company Leaders Offered Important Lessons 19 | Policy should reflect company’s values • Inclusive and comprehensive policies that promote equal access to the benefit to all employees Flexibility is important • Employees appreciate options, such as non-consecutive weeks off or option to take longer leave at less pay Company leaders should set the standard • Helps foster sense of normalcy and shows employees will be supported Support systems are critical • This is true for employees on leave and employees covering Metrics are few but important • Statistics on usage, replacement costs, employee retention and perceptions

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