Risk Insider: Terri Rhodes

Paid Family Leave Is Increasing Employee Retention Rates

By: | July 18, 2018 • 2 min read
Terri L. Rhodes is CEO of the Disability Management Employer Coalition. Terri was an Absence and Disability Management Consultant for Mercer, and also served as Director of Absence and Disability for Health Net and Corporate IDM Program Manager for Abbott Laboratories.

While there seems to be some momentum for federal paid family leave, it also continues to gain popularity with private employers and local and state governments. The reasons aren’t surprising — employees want it, and employers are more open to offering it as the labor market grows ever tighter. But more importantly, many of the organizations who implemented programs say that it came from the top down, with most leaders saying that it is just the right thing to do.

Beyond the feeling that employers “need to do more” to attract and retain talented employees nine years into an economic recovery, is there an actual business case for paid family leave?

That answer is a resounding absolutely.

One such group whose mission is to raise awareness of the benefits of paid family leave launched in 2017, The Paid Leave Project. The group has been gathering and analyzing data on paid leave programs over the last year and half. According to its most recent analysis, the leading benefit of paid family leave is that it increases retention, especially among women.  For example, when Google expanded its parental leave policy from 12 to 18 weeks in 2007, the retention rate of women post-maternity leave increased by 50 percent. When Aetna expanded its maternity leave policy, the percentage of women returning to work there jumped from 77 percent to 91 percent.

The next most important benefit of paid leave is its positive impact on talent attraction. A 2016 Deloitte survey reported that seventy-seven percent of employees said the amount of paid parental leave had some influence on their choice of employer. Fifty percent said they’d rather have more parental leave than a pay raise.

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Paid leave benefits have an impact on more than talent retention and attraction. Improved employee engagement, reinforced company values, and enhanced brand equity are just a few.

Paid family leave can even improve health measures and lower healthcare costs.

For example, Nestlé offers 26 weeks of leave, 14 of which are paid leave. All employees, salaried and hourly, are eligible. Since implementing the program, Nestlé employees have a lower incidence of needing at least one sick visit for infants. Nestlé has also experienced health care costs which are 12 percent lower for infants whose parents participate in their leave program.

…when Google expanded its parental leave policy from 12 to 18 weeks in 2007, the retention rate of women post-maternity leave increased by 50 percent. When Aetna expanded its maternity leave policy, the percentage of women returning to work there jumped from 77 percent to 91 percent.

While the benefits are clear, it’s important that employers take steps to avoid pitfalls when adding or expanding paid leave.

The first is to consider paid family leave rather than just paid parental leave. This reduces the potential for resentment among employees who aren’t parents and sends an important signal that all kinds of families are valued.

The second step is to do what Nestle did and offer the same benefits to all employees. Again, this signals that all employees are valued team members and increases a sense of unity and common purpose. It also lowers the risk of discrimination claims and potential litigation.

And while paid family leave requires enhanced absence management policies, processes, and procedures, investing in those programs make sense anyway. Paid family leave’s return on investment is large enough that, for most organizations, the question is no longer “should we offer paid leave, but why shouldn’t we offer it?”

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]