Businesses offering paid parental leave win high return rates, Diversity Council figures reveal

Employers offering paid parental leave policies of their own are recording positive rates of return as high as 89%, according to new research from Diversity Council Australia.

But small business is still lobbying for the Federal Government to handle all the payments for the official scheme, nearly a year after Canberra introduced a mandate for business to keep paying employees even while on leave.

“I still believe the government should take that responsibility on,” Council of Small Business Australia executive director Peter Strong told SmartCompany this morning.

The new research from Diversity Council Australia has found that 91% of 74 organisations surveyed – mostly large businesses – said they offered a policy for paid parental leave, while 96% offered part-time and reduced hours.

The return to work rate was 89%. DCA chief executive Nareen Young said the figures demonstrate how including a paid parental leave program will help attract and retain employees.

“I think our leading employers really are committed to this, and so are looking at all of the options. I’m not surprised at all.”

“One of the aims of paid parental leave is to keep attrition down, and it’s pretty clear to me that judging from these results, that plan has worked.

Young also said small businesses wary of schemes shouldn’t be turned away from creating paid parental plans of their own. In fact, she argues, the future of your business demands it.

“It’s really not hard to set up a scheme like this. It’s just about understanding that it’s about time all of the employers in our community start offering programs like this.”

“Otherwise, the talent in our country is going to be concentrated in the large employers”

Some other figures from the research show 14 weeks was the average length of paid parental leave, while 59% of members’ policies stated employees on parental leave were eligible for a salary review while they were on leave.

The most generous plan was up to 52 weeks paid leave, with 12 weeks provided at full pay and up to 50 weeks paid at 60% of salary for the primary carer. 10% of DCA members made super contributions on unpaid leave.

Employee couples were also given flexible options, with 23% allowing parents to share the one paid parental leave period, provided they didn’t take it concurrently.

The government has often encouraged businesses to top up its own program with parental leave schemes of their own. The DCA figures suggest many larger businesses are doing just that.

But Strong says despite the good figures from the Diversity Council, he still wants the government to handle the paymaster responsibility.

“It’s great to see these types of return figures, but the fact of the matter is, the small business ends up doing more work than they need to.”

“You shouldn’t just bring a third party into a payment system.”

Strong says he’s heard from some businesses already, some of which say the paymaster duty is a nuisance while others don’t mind. However, he says the idea that a business can maintain a connection to the employee through these payments isn’t a deal breaker.

“They’re going to stay connected because of the relationship with the people there, not because of who’s paying them.”

However, Young says it’s all about providing flexibility.

“Our member organisations have been focused on good return to work programs or stay in touch for many years now. Now, they’re simply reaping the benefits.”