Netflix’s Special Gift

netflixCurrently, according to the Family and Medical Leave Act, employees expecting to care for a newborn or newly adopted child are entitled up to 12 weeks of leave, but hold your applause; this leave is unpaid. According to the Center for American Progress, only 12 percent of Americans work for companies that offer paid leave. This low percentage is due to the fact that paid leave only applies to companies that have more than 50 employees, which means very few Americans can take benefit since a majority work for small to midsize companies that have fewer than 50 employees. Barack Obama addressed this issue earlier this year and extended parental leave for federal employees to six weeks. Netflix Inc. took a similar move recently, but in a much drastic way. Rather than offering a few weeks, Netflix has offered its employees up to a year of unlimited leave—yes, this leave is paid. However, Netflix’s move is now raising concerns as to whether or not this is beneficial for the company and its employees.

Let us first take a look at the situation regarding current leave policies. The combination of the lack of pay and time off that most policies offer to expectant parents are usually insufficient to support their needs, resulting in many parents having difficulties caring for their newborn or newly adopted child. For example, in a report known as “Failing its Families: Lack of Paid Leave and Work-Family Supports in the US,” it has been shown that the meager weeks parents are offered often contribute to delaying immunizations for their infants, which is dangerous as immunizations are one of the few measures parents can take to protect their children from diseases. Furthermore, the lack of time given to recover has also been shown to cause mothers to give up breastfeeding early. This is a cause for concern as most children die during the first few weeks of life due to factors such as infections, premature birth, and asphyxia. Breastfeeding has been shown to prevent deaths due to such factors, showing the necessity of breastfeeding. Moreover, the American Academy of Pediatrics recommends that babies be breastfed for at least six months to a year in order to receive proper nourishment. Unfortunately, a 2011 report has found that only 49 percent of babies are breastfed at six months.  Along with the risks to their children’s health, parents often find their careers being negatively affected as a result of taking leave either due to pressure by employers or by the harsh fact that they cannot afford to take time off without pay while raising a child. Thus, the negative impacts short unpaid leave has on both parents and their children show the need for a paid leave that also provides a sufficient amount of time for parents to recover.

With Netflix’s new parental leave policy, however, employees will get the support they need. Tawni Cranz, Netflix’s chief talent officer, wrote on the company’s blog, “We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances.” Netflix’s move to provide a year of unlimited paid leave for its employees is one in which helps to address the harmful effects that most current leave policies have on parents. In contrast to these policies, Netflix’s parental leave policy allows its employees to be rest assured with the knowledge that they can take a year off while not having to worry about work or finances. Also, parents can be at ease knowing that their children’s health is also being benefited. To illustrate, Dr. Jack P. Shonkoff, director of the Center on the Developing Child at Harvard University, states, “The need for time to form secure attachments is critically important. It’s one of the most important things you can do to build a foundation for a lifetime of healthy development.” In addition, according to the U.S. Centers for Disease Control and Prevention, babies also learn to focus their vision during this first year. Furthermore, the first year is when babies begin the early stages of language development. In short, it is important for parents to invest a significant portion of time with their child in order to ensure future growth, and Netflix’s unlimited parental leave policy offers just that.

Not only can employees take benefit from this policy, so can Netflix. In order to continue its success, Netflix must continuously compete against other companies for talented employees. With this policy, Netflix is equipped to attract top talents away from its competitors. According to Stewart Friedman, a professor at the University of Pennsylvania’s Wharton School, explains that what is most desired by employees is a “flexibility” or balance between their personal and work lives. Enabling its employees to do just that, Netflix shows itself to be a much more attractive option. Furthermore, Netflix’s move to offer unlimited parental leave—for both mothers and fathers—also addresses gender stereotyping in the workplace, which may also bring in more employees. Netflix could have easily offered this policy only to mothers. However, Netflix’s particular move to share the benefits with fathers addresses the common stereotype that men are not as involved with raising their children as are women. By sharing this policy with both mothers and fathers, Netflix sends the positive message that child-care is a job for two, thereby supporting gender equality in the workplace. As such, in an age where gender equality matters tremendously, this policy may prove very desirable to top talents. Along with being benefited with more talented employees, Netflix can also take benefit financially, contrary to the thinking that offering paid leave is financially detrimental to companies. For instance, it has been shown that offering paid leave to employees improves employee retention. In other words, employees are more likely to return to work for the same employer when they are paid during their leave. As a result, employers can benefit from reducing turnover costs that are caused when employees quit due to a lack of paid leave. Along with reducing costs due to turnover, Netflix’s policy can also help to improve the productivity of employees, which also has been shown to increase when companies offer paid leave to employees. Thus, Netflix’s unlimited parental leave will be both beneficial to its employees and the company.

Despite the benefits that Netflix’s new policy offers, it has been argued that employees will only be able to reap the benefits if they actually use it. The main concern regarding Netflix’s parental leave policy has to do with the fact that it offers a year of unlimited leave. With this policy, Netflix does not track the days in which employees are gone and does not provide a set return date. Carol Sladek, who leads work-life consulting at Aon Hewitt, states, “Most people need some parameters around leave to have that ‘permission’ to take what they need. Without those parameters, it’s a lot more difficult for employees, managers and the corporate culture to be accepting.” One of the reasons for this, she adds, is due to the fact that “we’ve been wired in the U.S. to think about time off as an entitlement that you accrue.” In other words, rather than taking advantage of such generous offers, employees often take less time off due to feelings of guilt. This kind of thinking is understandable when you think about it. Imagine your boss telling you that you can take up to a year of unlimited paid leave. You are grateful for the news—after all, you get to take a year off and get paid full salary. However, when you look at your co-workers who will have to cover for your absence and those who simply cannot access this benefit, you get the feeling that it is wrong for you to enjoy the year off. It is thoughts such as these that prompt many workers to take less time off than they are offered. Thus, it has also been argued that offering more time for leaves causes strain in relationships between co-workers, which then result in less effective workplace environments. Indeed, such a generous policy may create tensions among co-workers in other companies, especially those that normally do not offer their employees such freedom. However, for many years Netflix has been upholding a “freedom and responsibility” approach, which can be seen through their unlimited vacation policy. Essentially, this approach allows employees the freedom of taking time off as long as their work is completed. The purpose of this policy is to treat employees like adults and encourage them to take time off without feeling guilty about it. As such, Netflix’s new parental leave policy may actually prove to work effectively and be of good use to the company.

With the many benefits that this policy offers, it seems that Netflix has made the right move to offer parental leave. During the time that parents take their leave, they will be paid full salary. By being paid during the time they are gone, employees will not have to worry about finances while caring for their children. Furthermore, parents will be rest assured with the knowledge that their children are developing healthily as a result of their presence at home. Along with its employees, Netflix will also be benefited from this new policy, being able to attract top talents and succeed financially. For these reasons, Netflix’s unlimited parental leave policy is one in which will prove special for its employees and the company.

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