Businesses embrace paid parental leave

The new legislation entitles primary carers of newborns and adopted children to up to 18 weeks leave at the national minimum wage of $570 a week, funded by the federal government.

The survey found 72 per cent of those surveyed already offer paid parental leave. Almost a quarter of the rest would consider topping up leave entitlements, rather than relying solely on the government.

Tricia Sneddon, human capital strategy and talent consulting leader for Mercer’s Australia and New Zealand business, says the new legislation has been embraced.

“Organisations that already have a policy in place are not looking to reduce their benefits to their employees but they are using the government’s contribution as an add-on.

“Businesses are seeing this particular offering as a competitive advantage; they’re looking at how it can attract their workers back to the workplace after having children and how they can be the employer of choice.”

The industries offering the highest number of weeks of paid parental leave are education and research with a median of 23 weeks, nine weeks more than the next highest, which include energy and utilities, health care and federal, state and local government.

All businesses are required to fully implement the new scheme by July 1, so now is the time for organisations that don’t offer a paid parental leave policy to assess the size and demographics of their workforce and consider the inclusion of parental leave into a broader total reward offering that employees can value.

The survey shows that the challenge for employers will be compliance, with 59 per cent of respondents indicating the complexities will be moderate.

“One of the issues with the legislation will be the need to backfill critical skills.

“Remembering that this legislation affects every organisation, the smaller companies will find it more difficult to backfill someone on paid parental leave, which may be a concern if it’s a customer-facing role or a critical skill in a technical area,” Sneddon says.

“On the upside, it’s going to increase the short-term contractor market, which means companies will have to be much more focused on their workforce planning.”

Joanne Conradi, group people executive, global mining business at Parsons Brinckerhoff, says the legislation is a step in the right direction for gender equality in the workplace.

“At the most basic level, paid parental leave gives rise to the notion of personal choice.

“It gives new mothers and families access to a few more options and thus personal choices around how they might manage their return to work,” Conradi says.

“Progressive companies have already moved beyond compliance to innovative policy and practice.

“Initiatives like gender-blind recruitment, increasing female involvement in the recruitment and selection process, setting targets to strive for regarding female workforce participation at all levels within business, and accelerated development programs that invest in building female talent are all a good start.

“Parsons Brinckerhoff is one of the companies not frightened by this.

“ For example, we’ve introduced an increased maternity allowance of 16 weeks’ pay, working in parallel with the federal government’s paid parental leave scheme.

“Companies that embrace these initiatives are visibly reaping new levels of financial reward and more flexible and nimble business performance.”